2 Customer-based brand equity - Pearson...

Customer-based brand equity2

PREVIEW

Chapter 1 introduced some basic notions about brands and the role that they have played andare playing in marketing strategies. The chapter concluded by observing that marketers arenow faced with an increasing number of tactical options that must be efficiently and effectivelyapplied to an increasing number of product variations for the brand. The concept of brand eq-uity was identified as having the potential to provide guidance to marketers to help them makethose decisions. The next few chapters explore brand equity and how to identify and establishan effective brand positioning.

This chapter more formally examines the brand equity concept, introducing one particularview – the concept of customer-based brand equity – that will serve as the organizing frame-work for the rest of the book.1 It considers the sources of customer-based brand equity andthe outcomes or benefits that result from those sources. The chapter then presents thecustomer-based brand equity model in detail and discusses the implications of that model.Brand Briefing 2.5 at the end of the chapter provides a detailed overview of the advantages ofcreating a strong brand. Chapter 3 concentrates on brand positioning.

CUSTOMER-BASED BRAND EQUITY

Two questions often arise regarding brands: ‘What makes a brand strong?’ and ‘Howdo you build a strong brand?’ To answer these questions, this section introduces thecustomer-based brand equity (CBBE) model. This model incorporates theoreticaladvances and managerial practices in understanding and influencing consumer be-haviour. Although useful perspectives concerning brand equity have been put forth,the CBBE model provides a unique point of view as to what brand equity is and how itshould be built, measured and managed.

The CBBE model approaches brand equity from the perspective of the consumer –whether this be an individual or an organization. Understanding the needs andwants of consumers and organizations and devising products and campaigns tosatisfy them are at the heart of successful marketing. In particular, two fundamental

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Customer-based brand equity 43

questions faced by marketers are: ‘What do different brands mean to consumers?’and ‘How does the brand knowledge of consumers affect their response to market-ing activity?’

The basic premise of the CBBE model is that the power of a brand lies in what cus-tomers have learned, felt, seen and heard about the brand as a result of their experi-ences. In other words, the power of a brand lies in what resides in the minds of customers.The challenge for marketers in building a strong brand is ensuring that customershave the right type of experiences with products and services and their accompany-ing marketing campaigns so that the desired thoughts, feelings, images, beliefs, per-ceptions and opinions become linked to the brand.

Customer-based brand equity is defined as the differential effect that brand knowl-edge has on consumer response to the marketing of that brand. A brand is said tohave positive customer-based brand equity when consumers react more favourablyto a product and the way it is marketed when the brand is identified than when it isnot (eg, when the product is attributed to a fictitious name or is unnamed). Thus, abrand with positive customer-based brand equity might result in consumers beingmore accepting of a brand extension, less sensitive to price increases and withdrawalof advertising support or more willing to seek the brand in a new distribution chan-nel. On the other hand, a brand is said to have negative customer-based brand equityif consumers react less favourably to marketing activity for the brand compared withan unnamed or fictitiously named version of the product.

There are three ingredients to this definition:

• differential effect;• brand knowledge;• consumer response to marketing.

First, brand equity arises from differences in consumer response. If no differencesoccur, then the brand name product is essentially a commodity. Competition, mostlikely, would then be based on price. Second, these differences in response are a re-sult of consumers’ knowledge and experience of the brand. Thus, although stronglyinfluenced by the marketing activity of the firm, brand equity ultimately depends onwhat resides in the minds of consumers. Third, the differential response by con-sumers that makes up the brand equity is reflected in perceptions, preferences andbehaviour related to all aspects of the marketing (eg, choice of a brand, recall of copypoints from an ad, actions in response to a sales promotion or evaluations of a pro-posed brand extension). Brand Briefing 2.5 provides a detailed account of theseadvantages (Figure 2.1).

The simplest way to illustrate what is meant by customer-based brand equity is toconsider some typical results of product sampling or comparison tests. For example,with blind taste tests, one group of consumers samples a product without knowingwhich brand it is, whereas another group samples the product knowing which brandit is. Invariably, differences arise in the opinions of the two groups even though theyare consuming the same product.

For example, Larry Percy reports the results of a beer-tasting that showed how dis-criminating consumers could be when given the names of the well-known brands ofthe beer they were drinking, but how few differences consumers could detect whenthey did not know the brand names. Figure 2.2 displays the perceptual maps – visual


Strategic brand management44

Figure 2.1 Marketing advantages of strong brands

tools to portray perceptual differences between brands expressed by consumers – thatwere derived from the two types of responses. As it turns out, even fairly knowledge-able consumers can have difficulty distinguishing different beers (Figure 2.2).

When consumers report different opinions regarding branded and unbranded ver-sions of identical products, it must be the case that knowledge about the brand, createdby whatever means (eg, past experiences, marketing activity for the brand or word ofmouth), has somehow changed consumers’ product perceptions. Examples of branded

• Improved perceptions of product performance.• Greater loyalty.• Less vulnerability to competitive marketing.• Less vulnerability to crises.• Larger margins.• More inelastic consumer response to price increases.• More elastic consumer response to price decreases.• Greater trade co-operation and support.• Increased marketing communication effectiveness.• Possible licensing opportunities.• Additional brand extension opportunities.

Budweiser

Miller Lite

Coors

Colt 45

Guinness

Pabst

BudweiserMiller Lite

CoorsColt 45 Guinness

Pabst

Figure 2.2 Results of blind beer tasting tests: (a) when drinkers are aware of brands used (b) when no brands are

mentioned



differences, as with the beer experiment, can be found with most products – conclusiveevidence that consumers’ perceptions of the performance of a product depend ontheir impressions of the brand. In other words, clothes may seem to fit better, a carmay seem to drive more smoothly and the wait in a bank may seem shorter, depend-ing on the brands involved.

Brand equity as a bridgeSo, according to the customer-based brand equity model, the power of a brand lies inthe minds of consumers or customers and what they have experienced and learnedabout the brand over time. Consumer knowledge drives the differences that manifestthemselves in terms of brand equity. This realization has important managerial im-plications. In an abstract sense, according to this view, brand equity provides mar-keters with a strategic bridge from their past to their future.

Brands as a reflection of the past

Money spent each year on manufacturing and marketing products should not beconsidered as ‘expenses’ but as ‘investments’ – investments in what consumerslearned, felt, experienced and so forth about the brand. If not properly designed andimplemented, these expenditures may not be good investments, in that the rightknowledge structures may not have been created in consumers’ minds, but theyshould be considered investments nonetheless. Thus, the quality of the investment isthe most critical factor, not necessarily the quantity, beyond some minimal thresh-old. In that sense, it is actually possible to ‘overspend’ on brand building if money isnot being spent wisely. Conversely, as will be evident in this book, some brands thatare being considerably outspent by rivals can amass brand equity by judiciousspending on marketing activities that create valuable, enduring memories in theminds of consumers.

Brands as a direction for the future

At the same time, the brand knowledge created by these marketing investments dic-tates appropriate and inappropriate directions for the brand. Consumers will decide,based on their brand beliefs, attitudes and so on, where they think the brand shouldgo and grant permission (or not) to any marketing action or programme. So, at theend of the day, the true value and future prospects of a brand rest with consumersand their knowledge about the brand.

In short, regardless of the definition adopted, the value to marketers of brandequity as a concept depends on how they use it. Brand equity can offer focus andguidance, providing marketers with a means to interpret their marketing perform-ance and help design marketing campaigns. Everything the firm does can enhance ordetract from brand equity. Those marketers who build strong brands have embracedthe concept and use it to its fullest as a means of clarifying, communicating and im-plementing their marketing actions. The process of creating such brand power is notwithout its critics, however, as described in Brand Briefing 2.1. The next section con-siders the issue of brand knowledge and CBBE in more detail.

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Brand Briefing 2.1

No Logo

In her book No Logo, Naomi Klein details the aspects of global corporate growththat have led to consumer backlash against brands. She explains the subject of herbook as follows:

The title No Logo is not meant to be read as a literal slogan (as in ‘No morelogos’!), or a post-logo logo (there is already a No Logo clothing line, I’m told).Rather, it is an attempt to capture an anti-corporate attitude I see emergingamong many young activists. This book is hinged on a simple hypothesis: thatas more people discover the brand-name secrets of the global logo web, theiroutrage will fuel the next big political movement, a vast wave of oppositionsquarely targeting those with very high name-brand recognition.

Klein writes about the increasing occupation of free and open space by advertising.The author cites marketing campaigns that exist within schools and universities,among other examples of advertising encroaching on traditionally ad-free space.Klein asserts that as marketers compete for ‘eyeballs’ using unconventional andunexpected means, fewer ad-free spaces remain and consumer resentment builds.Klein then argues that the vast number of mergers and acquisitions in the past twodecades, and the increasing number of brand extensions, has limited consumerchoice and engendered consumer resentment. She cautions that an inherent dan-ger of building a strong brand is that the public will be all the more eager to see thebrand tarnished once unseemly facts surface.

Klein also details movements that have arisen to protest against the power of largecompanies and the proliferation of branded space that accompanies this growth.The author highlights such anticorporate practices as ‘culture jamming’ and ‘ad-busting’, which serve to subvert and undermine marketing by attacking the mar-keters on their own terms. Klein also discusses the formation of labour activistorganizations such as Essential Action and the International Labour Organization,which perform labour monitoring and hold companies accountable for the treat-ment of their workers. Klein observes that the issues of corporate conduct are nowhighly politicized. As a result, Klein notes: ‘Political rallies, which once wound theirpredicable course in front of government buildings and consulates, are now just aslikely to take place in front of the stores of the corporate giants.’

Her follow-up book, Fences and Windows, reviews newspaper columns written fromlate 1999 to 2002 covering anti-globalization topics related to corporate behaviour,unions and public protests to summits. Publishers Weekly observed:

The two title images recur throughout: the fences are real, steel cages keepingprotesters from interfering with summits, but they are also metaphorical,such as the ‘fence’ of poverty that prevents the poor from receiving adequate



MAKING A BRAND STRONG: BRAND KNOWLEDGE

From the perspective of the CBBE model, brand knowledge is the key to creatingbrand equity, because it creates the differential effect that drives brand equity. Whatmarketers need, then, is an insightful way to represent how brand knowledge existsin consumer memory. An influential model of memory developed by psychologistsis helpful in that regard.2 The associative network memory model views memory as anetwork of nodes and links, in which nodes represent stored information or conceptsand links represent the strength of association between this information or concepts.Any type of information can be stored in the memory network, including informa-tion that is verbal, visual, abstract or contextual in nature.

Consistent with the associative network memory model, brand knowledge is con-ceptualized here as consisting of a brand node in memory with a variety of associa-tions linked to it. In particular, brand knowledge can be characterized in terms of twocomponents: awareness and image. Brand awareness is related to the strength of thebrand node or trace in memory, as reflected by consumers’ ability to identify thebrand under different conditions.3 Brand awareness is a necessary, but not always suf-ficient, step in building brand equity. Other considerations, such as the image of thebrand, often come into play.

Brand image has long been recognized as an important concept.4 Although therehas not always been agreement on how to measure brand image,5 one generallyaccepted view is that, consistent with an associative network memory model, brandimage can be defined as perceptions about a brand as reflected by the brand associa-tions held in consumer memory.6 In other words, brand associations are the other in-formational nodes linked to the brand node in memory and contain the meaning ofthe brand for consumers. Associations come in all forms and may reflect characteris-tics of the product or aspects independent of the product itself.

For example, consider Apple computers. If someone asked you what came tomind when you thought of them, what might you say? You might reply with asso-ciations such as ‘user-friendly’, ‘creative’, ‘for desktop publishing’, ‘used at many

Brand Briefing 2.1 continued

education or healthcare. Klein argues that globalization has only delivered itspromised benefits to the world’s wealthiest citizens and that its emphasis onprivatization has eroded the availability of public services around the globe.

Sources: Naomi Klein, No Logo: Taking aim at the brand bullies, New York: Picador, 1999; Naomi Klein,Fences and Windows: Dispatches from the front lines of the globalization debate, New York: Picador, 2002;Review, Publishers Weekly, 2002.



User-friendly

Fun

EducationalMacintosh

Innovative

Apple logo

Cool

Creative

PowerBook

Friendly

Desktoppublishing

Graphics

Apple

Figure 2.3 Possible Apple computer associations

schools’ and so forth. Figure 2.3 shows some common associations for Apple com-puters among consumers. The associations that came to mind for you would makeup your brand image for Apple. Through marketing, Apple has been able to achievea rich brand image in the minds of some consumers. Different consumers mightthink of different associations for Apple, although many associations are likely to beshared by a majority of consumers. In that sense, one can refer to ‘the’ brand image ofApple, but at the same time, it must be recognized that this image may vary, perhapseven considerably, depending on the consumers or market segments involved.

Other brands, of course, will be characterized by a different set of associations. Forexample, McDonald’s marketing campaign attempts to create brand associations inconsumers’ minds with ‘quality’, ‘service’, ‘cleanliness’ and ‘value’. The company’srich brand image probably also includes strong associations to ‘Ronald McDonald’,‘golden arches’, ‘for kids’ and ‘convenient’, as well as perhaps potentially negativeassociations such as ‘fast food’. Coca-Cola’s marketing campaign strives to linkbrand associations in consumers’ minds with ‘refreshment’, ‘taste’, ‘availability’, ‘af-fordability’ and ‘accessibility’. Whereas Mercedes-Benz has achieved strong associa-tions with ‘performance’ and ‘status’, Volvo has created a strong association with‘safety’. Chapter 3 reviews the types of associations that can become linked with thebrand. Chapter 9 outlines research techniques to measure these associations.

SOURCES OF BRAND EQUITY

What causes brand equity to exist? How do marketers create brand equity?Customer-based brand equity occurs when the consumer has a high level of aware-ness and familiarity with the brand and holds some strong, favourable and uniquebrand associations in memory. In some cases, brand awareness alone is sufficientto result in a more favourable consumer response – for example, in low-involvement



decision settings where consumers are willing to base their choices merely on famil-iar brands. In most other cases, however, the strength, favourability and uniquenessof the brand associations play a critical role in determining the differential responsemaking up the brand equity. If the brand is perceived by consumers to be the same asa representative version of the product or service in the category, then consumer re-sponse to marketing for the brand would not be expected to vary from when themarketing is attributed to a fictitiously named or unnamed product or service. If thebrand has some salient, unique associations, then consumer responses should differ.

For branding strategies to create brand equity, consumers must be convinced thatthere are meaningful differences between brands. The key to branding is that con-sumers must not think that all brands in the category are the same. Thus, establishinga high level of brand awareness and a positive brand image in consumer memory –in terms of strong, favourable and unique brand associations – produces the knowl-edge structures that can affect consumer response and produce different types ofcustomer-based brand equity.

Brand awarenessBrand awareness consists of brand recognition and brand recall performance. Brandrecognition relates to consumers’ ability to confirm exposure to the brand when giventhe brand as a cue. In other words, brand recognition requires that consumers cancorrectly discriminate the brand as having been seen or heard before. For example,when consumers go to a shop, is it the case that they will be able to recognize thebrand as one to which they have been exposed? Brand recall relates to consumers’ability to retrieve the brand from memory when given the product category, theneeds fulfilled by the category or a purchase or usage situation as a cue. So, brandrecall requires that consumers correctly generate the brand from memory whengiven a relevant cue. For example, recall of Kellogg’s Corn Flakes will depend onconsumers’ ability to retrieve the brand when they think of the cereal category or ofwhat they should eat for breakfast or eat for a snack at the shop (when making apurchase), at home (when making a consumption choice) or wherever.

If research reveals that consumer decisions are made at the point of purchase,where the brand name, logo, packaging and so on will be visible, then brand recog-nition will be important. If research reveals that consumer decisions are mostly madein settings away from the point of purchase, on the other hand, then brand recall willbe more important. As a cautionary note, even though brand recall itself may beviewed as less important when consumer decisions are made at the point ofpurchase, consumers’ brand evaluations and choices will still often depend on whatelse they recall about the brand given that they are able to recognize it there.

As is the case with most information in memory, it is generally easier to recognize abrand than it is to recall it from memory. The relative importance of brand recall andrecognition will depend on the extent to which consumers make product-related deci-sions with the brand present or not.7 For example, if decisions are made in the shop,brand recognition may be more important because the product will be present. Out-side the shop or in any situation where the brand is not present, on the other hand, it isprobably more important that the consumer be able to recall the brand from memory.



For this reason, brand recall is critical for service and online brands: consumers mustseek the brand and therefore be able to retrieve it from memory when appropriate.

Consequences of brand awareness

Brand awareness plays an important role in consumer decision-making for threemain reasons.

Learning advantages The first way that brand awareness affects decision-making isby influencing the formation and strength of the brand associations that make up thebrand image. A necessary condition for the creation of a brand image is that a brandnode has been established in memory. The nature of that brand node should affect howeasily different kinds of information can become attached to the brand in memory asbrand associations. The first step in building brand equity is to register the brand in theminds of consumers, and the choice of brand elements may make that task easier ormore difficult, as described in Chapter 4.

Consideration advantages Second, raising brand awareness increases the likelihoodthat the brand will be a member of the consideration set, the handful of brands that re-ceive serious consideration for purchase.8 Research has shown that consumers arerarely loyal to a single brand but instead have a set of brands that they would considerbuying and another – possibly smaller – set of brands that they actually buy regularly.Because consumers typically only consider a few brands for purchase, making surethat a brand is in the consideration set is likely to exclude other brands. Research inpsychology on ‘part-list cuing effects’ has shown that recall of some information caninhibit recall of other information.9 In a marketing context, that means if a consumerthinks of going to Burger King for a quick lunch, he or she may be less likely to thinkof going to another fast food chain.10

Choice advantages Third, brand awareness can affect choices between brands in theconsideration set, even if there are essentially no other associations to those brands.11

For example, consumers have been shown to adopt a decision rule to buy only morefamiliar, well-established brands in some cases.12 Thus, in low-involvement decisionsettings, a minimum level of brand awareness may be sufficient for product choice,even in the absence of a well-formed attitude.13 One influential model of attitudechange and persuasion, the elaboration-likelihood model, is consistent with the notionthat consumers may make choices based on brand awareness considerations whenthey have low involvement.

Low involvement results when consumers lack either purchase motivation(eg, when consumers don’t care about the product or service) or purchase ability (eg,when consumers do not know anything else about the brands in a category).14

1. Consumer purchase motivation: although products and brands may be critical to mar-keters, to many consumers in many categories, choosing a brand is not a life-or-deathdecision. For example, despite the sums spent on TV advertising to persuade con-sumers of product differences, one survey showed that 40 percent of consumersbelieved all brands of petrol were about the same or did not know which brand wasbest. A lack of perceived differences between brands in a category is likely to lead toconsumers who are unmotivated regarding the brand choice process.



2. Consumer purchase ability: consumers of some products do not have the knowledgeor experience to be able to judge product quality. The obvious examples are prod-ucts with a high degree of technical sophistication (eg, telecommunications equip-ment involving state-of-the-art features). Yet, there are instances with seeminglyless complicated products of consumers still maybe lacking the ability to judgequality. Consider a college student who has not really had to cook or clean beforeroaming the supermarket aisles for the first time, or a manager forced to make anexpensive capital purchase for the first time. The reality is that quality is often dif-ficult to judge without experience and expertise. In such cases, consumers will usewhatever shortcut they can come up with to make their decisions. At times, theymay end up simply choosing the brand with which they are most familiar.

Establishing brand awareness

In the abstract, brand awareness is created by increasing the familiarity of a brandthrough repeated exposure, although this is generally more effective for brand recog-nition than for brand recall. That is, the more a consumer ‘experiences’ the brand byseeing it, hearing it or thinking about it, the more likely it is that the brand will be-come strongly registered in memory. Thus, anything that causes consumers to experi-ence a brand name, logo, packaging or slogan can potentially increase familiarity andawareness of that brand element. Examples include advertising and promotion, spon-sorship and event marketing, publicity and public relations and outdoor advertising.Moreover, it is important to visually and verbally reinforce the brand name with a fullcomplement of brand elements (eg, in addition to its name, Cadbury’s uses its hand-written logo and the colour purple to enhance consumer awareness in many ways).

Although brand repetition increases the strength of the brand node in memory,and thus its recognizability, improving recall of a brand requires linkages in memoryto appropriate product categories or other situational purchase or consumption cues.In particular, to build awareness, it is often desirable to develop a slogan or jinglethat creatively pairs the brand and the appropriate category or purchase or con-sumption cues (and, ideally, the brand positioning as well, in terms of building a pos-itive brand image). Additional use can be made of the other brand elements – logos,symbols, characters and packaging.

The manner by which the brand and its corresponding product category arepaired (eg, as with an advertising slogan) will be influential in determining thestrength of product category links. For brands with strong category associations (eg,Toyota cars), the distinction between brand recognition and recall may not mattermuch – consumers thinking of the category are likely to think of the brand.For brands that may not have the same level of initial category awareness (eg, incompetitive markets or when the brand is new to the category), it is more importantto emphasize category links in the marketing campaign. Moreover, as will bediscussed in Chapter 11, strongly linking the brand to the proper category or otherrelevant cues may become especially important over time if the product meaning ofthe brand changes (eg, through brand extensions or mergers or acquisitions).

Many marketers have attempted to create brand awareness through ‘shock’ adver-tising with bizarre themes.15 For example, at the height of the dotcom boom, onlineretailer Outpost.com used ads featuring gerbils shot through cannons, wolverines



attacking marching bands and toddlers having the brand name tattooed on their fore-heads. The problem with such approaches is that they invariably fail to create strongcategory links because the product is not prominent enough, so inhibiting recall. Theyalso can generate ill-will in the process. Often coming across as desperate measures,they rarely provide a foundation for long-term brand equity. In the case of Outpost.com, most potential customers did not have a clue what the company did.

In short, brand awareness is created by increasing the familiarity of the brandthrough repeated exposure (for brand recognition) and strong associations with theappropriate product category or other relevant purchase or consumption cues (forbrand recall).16

Brand imageA positive brand image is created by marketing campaigns that link strong,favourable and unique associations to the brand in memory. The definition of cus-tomer-based brand equity does not distinguish between the source of brand associa-tions and the manner in which they are formed; all that matters is the resultingfavourability, strength and uniqueness of brand associations. This realization has im-portant implications for building brand equity. Besides marketer-controlled sourcesof information, brand associations can also be created in a variety of other ways: bydirect experience; from information communicated about the brand from the firm orother sources (eg, magazine reviews or other media) and word of mouth; and by as-sumptions or inferences from the brand itself (eg, its name or logo) or from the iden-tification of the brand with a company, country, channel of distribution or someparticular person, place or event.

Marketers should recognize the influence of these other sources of information byboth managing them as well as possible and adequately accounting for them indesigning communication strategies. Consider how The Body Shop was able to buildits brand equity.

The Body ShopThe Body Shop created a global brand image without using conventional adver-tising. Strong associations with personal care and environmental concern oc-curred through its products (natural ingredients only, never tested on animals,etc.), packaging (simple, refillable, recyclable), merchandising (detailed point-of-sale posters, brochures and displays), staff (encouraged to be enthusiastic andinformed about environmental issues), sourcing policies (using small local pro-ducers from around the world), social action (requiring each franchisee to run alocal community group) and public relations and activities (taking visible andsometimes outspoken stands on various issues).

Strength of brand associations

Making sure that associations are linked strongly to the brand will depend on howthe marketing campaign and other factors affect consumers’ brand experiences.Associations will vary in the strength of their connection to the brand node. Strengthis a function of both the amount, or quantity, of processing that information receivesas well as the nature, or quality, of that processing. The more deeply a person thinks



about product information and relates it to existing brand knowledge, the strongerthe resulting brand associations. Two factors facilitating such strength of associationare the relevance of the information and the consistency with which this informationis presented over time. The particular associations that are recalled and salient will de-pend not only on the strength of association, but also on the context in which thebrand is considered and the retrieval cues that are present that can serve as reminders.This section considers the factors that, in general, affect the strength and recallabilityof a brand association. Chapters 4 to 7 provide more concrete guidelines.

As noted earlier, consumer beliefs about brand attributes and benefits can beformed in different ways. Brand attributes are those descriptive features that charac-terize a product or service. Brand benefits are the personal value and meaning thatconsumers attach to the product or service attributes. In general, the source of infor-mation creating the strongest brand attribute and benefit associations is direct expe-rience. This type of information can be particularly influential in consumers’ productdecisions, as long as consumers are able to interpret their experiences accurately.Word of mouth or other non-commercial sources of information (consumer organiza-tions, the press, etc.) can also create strong associations. Word of mouth is likely to beparticularly important for restaurants, entertainment, banking and personal services.Commercial sources of information, such as advertising, are likely to create theweakest associations and thus may be the most easily changed. Figure 2.4 showshow consumers evaluate the importance of different reasons for brand choice.

To overcome this hurdle, marketing communication campaigns attempt to createstrong brand associations and recalled communication effects through a variety ofmeans. These include using creative communications that cause consumers to elabo-rate on brand-related information and relate it appropriately to existing knowledge;exposing consumers to communications repeatedly over time; and ensuring thatmany retrieval cues are present as reminders. Chapter 6 reviews how integratedmarketing communication campaigns can contribute to brand equity. Regardless,

0% 20% 40% 60% 80% 100%

Environmentalperformance

Rating in ConsumerReports magazine

Well-known/advertised

Personalrecommendation

Reputation

Quality

Price

Experience

Figure 2.4 Consumer reasons for brand choice in the USA

Source: GfK Roper Reports US, 2004. Figure shows percentage agreement with the statement, ‘In deciding whether to buycertain brands of a product, which of the things on this list are most important to you in deciding to buy a brand or not?’



the entire marketing campaign and all activities related to the brand will affect thestrength of brand associations. Starbucks, Google, Red Bull and Amazon.com are ex-amples of companies that created rich brand images without intensive advertising.

Favourability of brand associations

Choosing which favourable and unique associations to link to a brand requiresanalysis of the consumer and competitors to determine the optimal positioning for abrand. Chapter 3 reviews considerations involved in positioning and creating strong,favourable and unique brand associations. In the most basic sense, favourable brandassociations are created by convincing consumers that the brand possesses attributesand benefits that satisfy their needs and wants, such that they form positive overallbrand judgements. Thus, favourable associations for a brand are those associationsthat are desirable to consumers and are successfully delivered by the product andconveyed by the supporting marketing campaign (eg, such that the brand is seen ashighly convenient, reliable, effective, efficient, colourful and so on).

In terms of desirability, how important or valued is the image association to thebrand attitudes and decisions made by consumers? Desirability depends on threefactors.

• How relevant consumers find the brand association.• How distinctive consumers find the brand association.• How believable consumers find the brand association.

Creating a favourable association also requires that the firm be able to deliver on thedesired association. In terms of deliverability, the question is: what would be the costor investment necessary and the length of time involved to create or change thedesired association(s)? Deliverability also depends on three factors.

• The actual or potential ability of the product to perform.• The prospects of communicating that performance.• The sustainability of the actual and communicated performance over time.

Desirability and deliverability are examined in Chapter 3.

Uniqueness of brand associations

Brand associations may or may not be shared with competing brands. The essence ofpositioning is that the brand has a sustainable competitive advantage or ‘unique sell-ing proposition’ that gives consumers a compelling reason why they should buy thatparticular brand.17 These differences may be communicated explicitly by makingdirect comparisons with competitors or may be highlighted implicitly. Furthermore,they may be based on product-related or non-product-related attributes or benefits.In fact, in many categories, non-product-related attributes, such as user type or usagesituation, may more easily create unique associations (eg, the rugged Western imageof Marlboro cigarettes).

The existence of strongly held, favourably evaluated associations that are uniqueto the brand and imply superiority over other brands is critical to a brand’s success.Yet, unless the brand faces no competition, it is likely to share associations with otherbrands. Shared associations can help to establish category membership and definethe scope of competition with other products and services.18



Research on non-comparable options suggests that even if a brand does not facedirect competition in its product category, and so does not share product-relatedattributes with other brands, it can still share more abstract associations and face in-direct competition in a more broadly defined product category.19 Thus, although onetrain service may not compete directly with another, it competes indirectly withother forms of transport, such as airlines, cars and buses. A maker of educationalsoftware may be implicitly competing with other forms of education and entertain-ment, such as books, videos, television and magazines. For these reasons, brandingprinciples are now being used to market a number of different categories as a whole –for example, banks, furniture, carpets, bowling and trains.

A product or service category can also be characterized by a set of associations thatincludes specific beliefs about any member in the category, as well as overall atti-tudes towards all members in the category. These beliefs might include many of therelevant product-related attributes for brands in the category, as well as more de-scriptive attributes that do not necessarily relate to product or service performance(eg, the colour of a product, such as red for ketchup). Certain attributes or benefitsmay be considered prototypical and essential to all brands in the category, and a spe-cific brand may exist that is considered to be an exemplar and most representative ofthe product or service category.20 For example, consumers might expect a runningshoe to provide support and comfort and to be built well enough to withstandrepeated wear, and they may believe that Reebok or Adidas best represents a run-ning shoe. Similarly, consumers might expect a web retailer to offer easy navigation,a variety of offerings, reasonable shipping options, secure purchase procedures, re-sponsive customer service and strict privacy guidelines, and they may considerAmazon.co.uk to be the best example of an online retailer.

Because the brand is linked to the product category, some category associationsmay become linked to the brand, either in terms of specific beliefs or overallattitudes. Product category attitudes can be a particularly important determinant ofconsumer response. For example, if a consumer thinks that all brokers are greedy,then he or she probably will have similarly unfavourable beliefs about and negativeattitudes towards any particular brokerage house simply by virtue of its membershipof the category. Thus, in almost all cases, some product category associations that arelinked to the brand will also be shared with other brands in the category. Note thatthe strength of the brand associations to the product category is an important deter-minant of brand awareness.21

In short, to create the differential response that leads to customer-based brandequity, it is important that some of the strongly held brand associations are not onlyfavourable but also unique. Unique brand associations are not shared with compet-ing brands. Beliefs about unique attributes and benefits for brands that consumersvalue more favourably than competitive brands can lead to a greater likelihood ofthe consumers choosing the former brands.

Not all brand associations will be deemed important and viewed favourably byconsumers, nor will they be equally valued across different purchase or consumptionsituations. Moreover, not all brand associations will be relevant and valued in apurchase or consumption decision. The evaluations of brand associations may besituation- or context-dependent and vary according to the particular goals that con-sumers have in that purchase or consumption decision.22 An association may be val-ued in one situation but not another.23



For example, the associations that might come to mind for FedEx, an overnightdelivery service, might be ‘fast’, ‘dependable’ and ‘convenient’, with ‘purple andwhite packages and envelopes’. Even though it is a strong brand association, thecolour of the packaging may matter little to most consumers when choosing a deliv-ery service, although it may play an important brand awareness function. On theother hand, fast, dependable and convenient service may be more important in con-sumer choice, but even then only in certain situations. It may be that someone desiresthose benefits only when meeting an important deadline. If a consumer only needs adelivery ‘as soon as possible’, then it may be that other less expensive options wouldbe considered.

Chapter 3 considers additional aspects of strength, favourability and uniquenessof brand associations in terms of brand positioning and introduces the concepts ofpoints of parity and points of difference more formally. The next section outlines amore complete version of the customer-based brand equity model.

FOUR STEPS TO BUILDING A BRAND

The previous section considered what makes a strong brand. This section considershow a strong brand is built or created. According to the CBBE model, this can bethought of in terms of a sequence of steps, with each one contingent on achieving theprevious step. All the steps involve accomplishing certain objectives with customers,both existing and potential. The steps are as follows.

1. Identify the brand with customers and associate the brand in customers’ mindswith a specific product class or customer need.

2. Establish the totality of brand meaning in the minds of customers by strategicallylinking a host of tangible and intangible brand associations with certain properties.

3. Elicit the proper customer responses to this brand identification and brand meaning.4. Convert brand response to create an intense, active loyalty relationship between

customers and the brand.

These steps address fundamental questions that customers invariably ask aboutbrands – at least implicitly if not even explicitly – as follows (with correspondingbrand steps in parentheses).

1. Who are you? (Brand identity.)2. What are you? (Brand meaning.)3. What about you? What do I think or feel about you? (Brand responses.)4. What about you and me? What kind of association and how much of a connection

would I like to have with you? (Brand relationships.)

There is an obvious ordering of the steps in this ‘branding ladder’, from identity tomeaning to responses to relationships. That is, meaning cannot be established unlessidentity has been created; responses cannot occur unless the right meaning has beendeveloped; and a relationship cannot be forged unless the proper responses havebeen elicited.



Brand building blocksPerforming the four steps to create the right brand identity, brand meaning, brand re-sponses and brand relationship is a difficult process. To provide structure, it is usefulto think of sequentially establishing six ‘brand building blocks’ with customers. Toconnote the sequencing involved, these brand building blocks can be assembled as abrand pyramid. Creating brand equity involves reaching the pinnacle of the CBBEbrand pyramid and will only occur if the right building blocks are put into place. Thecorresponding brand steps represent different levels of the CBBE brand pyramid.This brand-building process is illustrated in Figures 2.5 and 2.6. Each of these stepsand corresponding brand building blocks and their sub-dimensions are examined inthe following sections.

Brand salienceAchieving the right brand identity involves creating brand salience with customers.Brand salience relates to aspects of the awareness of the brand – for example, how oftenand easily the brand is evoked under various situations or circumstances. To what ex-tent is the brand easily recalled or recognized? What types of cues or reminders arenecessary? How pervasive is this brand awareness?

As defined previously, brand awareness refers to customers’ ability to recall andrecognize the brand, as reflected by their ability to identify the brand. In other words,

Salience

Performance Imagery

Judgements Feelings

Resonance

4. Relationships

What about youand me?

Intense,active loyalty

1. Identity

Who are you?

2. Meaning

What are you?

3. Response

What about you?

Deep, broadbrand

awareness

Points of parityand difference

Positive, accessiblereactions

Branding objectiveat each stage

Stages of branddevelopment

Figure 2.5 Customer-based brand equity pyramid



how well do the brand elements serve the function of identifying the product? Brandawareness is more than just customers knowing the brand name and having seen it,perhaps even many times. Brand awareness also involves linking the brand name,logo, symbol and so forth to certain associations in memory. In particular, buildingbrand awareness involves helping customers to understand the product or servicecategory in which the brand competes. There must be clear links regarding whatproducts or services are sold under the brand name. At a broader, more abstractlevel, however, brand awareness also means making sure that customers knowwhich of their ‘needs’ the brand, through these products, is designed to satisfy. Inother words, what functions does the brand provide to customers?

Breadth and depth of awareness

Creating brand awareness thus involves giving the product an identity by linkingbrand elements to a product category and associated purchase and consumption orusage situations. From a strategic standpoint, it is important to have high levels ofbrand awareness under a variety of conditions and circumstances. Brand awarenesscan be characterized according to depth and breadth. The depth of brand awarenessconcerns the likelihood that a brand element will come to mind and the ease with

SalienceCategory identificationNeeds satisfied

PerformancePrimary characteristics and secondary featuresProduct reliability, durability and serviceabilityService effectiveness, efficiency and empathyStyle and designPrice

ImageryUser profilesPurchase and usage situationsPersonality and valuesHistory, heritage and experiences

JudgementsQualityCredibilityConsiderationSuperiority

FeelingsWarmthFunExcitementSecuritySocial approvalSelf-respect

ResonanceLoyaltyAttachmentCommunityEngagement

Figure 2.6 Sub-dimensions of brand building blocks



which it does so. For example, a brand that can be easily recalled has a deeper levelof brand awareness than one that only can be recognized. The breadth of brandawareness concerns the range of purchase and usage situations in which the brandelement comes to mind. The breadth of brand awareness depends to a large extent onthe organization of brand and product knowledge in memory.24 To illustrate some ofthe issues involved, consider the breadth and depth of brand awareness for Tropi-cana orange juice.

Tropicana

At the most basic level, it is necessary that consumers recognize the Tropicanabrand when it is presented or exposed to them. Beyond that, consumers shouldthink of Tropicana whenever they think of orange juice, particularly when theyare considering a purchase in that category. Additionally, consumers ideallywould think of Tropicana whenever they were deciding which type of drinkto have, especially when seeking a ‘tasty but healthy’ drink – some of the needspresumably satisfied by orange juice. Thus, consumers must think of Tropicanain terms of satisfying a certain set of needs whenever those needs arise. One ofthe challenges for any provider of orange juice in that regard is to link the prod-uct to usage situations outside of the traditional breakfast usage situation –hence the campaign to boost consumption of orange juice that used the slogan‘It’s not just for breakfast any more.’

Product category structure

As suggested by the Tropicana example, to fully understand brand recall, it is impor-tant to appreciate product category structure, or how product categories are organizedin memory. Typically, marketers assume that products are grouped at varying levelsof specificity and can be organized in a hierarchical fashion.25 Thus, in consumers’minds, a product hierarchy often exists, with product class information at the highestlevel, product category information at the second highest level, product type infor-mation at the next level and brand information at the lowest level.

The drinks market provides a good setting to examine issues in category structureand the effects of brand awareness on brand equity. Figure 2.7 shows one possiblehierarchy that might exist in consumers’ minds. According to this representation,consumers first distinguish between flavoured or unflavoured drinks (ie, water).Next, they distinguish between non-alcoholic and alcoholic drinks. Non-alcoholicdrinks are distinguished in consumers’ minds by whether they are hot (eg, coffee ortea) or cold (eg, milk, juices or soft drinks); alcoholic drinks are distinguished bywhether they are wine, beer or distilled spirits. Even further distinctions are possible.For example, the beer category could be further divided into no-alcohol, low-alcoholand full-strength beers. Full-strength beers can be further distinguished, by variety(eg, bitter or lager), by brewing method (eg, draught, ice or dry), by price and quality(eg, discount, premium or super-premium) and so on.

The organization of the product category hierarchy that generally prevails inmemory will play an important role in consumer decision-making. For example, con-sumers often make decisions in what could be considered a top-down fashion. Basedon this simple representation, a consumer would first decide whether to have water



or a flavoured drink. If the consumer chose a flavoured drink, then the next decisionwould be whether or not to have an alcoholic or non-alcoholic drink and so on.Finally, consumers might then choose a particular brand within a particular productcategory or product type in which they are interested. The depth of brand awarenesswould then relate to the likelihood that a brand came to mind, whereas the breadthof brand awareness would relate to the situations in which the brand might come tomind. In general, soft drinks have great breadth of awareness in that they come tomind in many consumption situations. Other drinks, such as alcoholic ones, milkand juices, have more limited consumption situations.

Strategic implications

Understanding the product hierarchy has implications for how to improve brandawareness, as well as how to position the brand (as will be addressed in Chapter 3).In terms of building awareness, in many cases, it is not only the depth of awarenessthat matters but also the breadth and linking the brand to various categories andcues in consumers’ minds. In other words, it is important that the brand not only betop-of-mind and have sufficient ‘mind share’, but it must also do so at the right timesand places. Breadth is an oft-neglected consideration, even for brands that are cate-gory leaders. For many brands, the question is not whether consumers can recall thebrand but where and when they think of the brand, and how easily and often theythink of the brand. In particular, many brands and products are ignored or forgottenduring possible usage situations. As Chapter 13 shows, increasing the salience of thebrand in those settings can drive consumption and increase sales volume. For exam-ple, US tax returns preparer H&R Block launched a campaign that attempted toestablish the company in the minds of consumers as a ‘year-round financial services

Drinks

Hotdrinks

Water

Milk Juices WineDistilledspirits

BeerSoft

drinks

Flavoured

AlcoholicNon-alcoholic

Figure 2.7 Drinks category hierarchy



provider’ that could provide help with mortgages, insurance, investments, bankingand financial planning services at any time.26

In some cases, the best route for improving sales is not by improving consumerattitudes towards a brand but by increasing the breadth of brand awareness and sit-uations in which consumers would consider using the brand. Consider the market-ing challenges for milk consumption in Europe.

Defending milk sales in EuropeMilk consumption has been in decline throughout the Western world for manyyears. Northern European countries have traditionally been the heaviest users ofmilk, while southern Europe has had a larger share of its dairy intake fromcheese. Regardless of national differences, the trend has been a steady decline inmilk consumption. During these years of decline, many attempts have been madeto counter the trend. Typically, these have focused on the health benefits of milkover other drinks – for instance, that milk is high in calcium content which sup-posedly means it is good for bones. Still, the decline in milk consumption has con-tinued. In more recent years, it seems dairy companies have shifted their focusfrom creating or reinforcing favourable associations with milk to inventing nicheproducts and different usage occasions. Now, there is milk specifically for expec-tant mothers in Portugal and Switzerland has a vitamin-enriched, flavoured milkwhere egg has been added. Another innovation, ‘night-time milk’ or melatonin-enhanced milk (melatonin is a hormone which in this way supposedly helps yougo to sleep), has been introduced in many European markets under differentlabels. Milk reinforced with Omega-3 exists in Italy and Ireland, effectively mak-ing the milk a vitamin supplement rather than a just a drink. Another innovationis flavoured milk for ‘on-the-go’ consumption, competing with Cola and othersoft drinks. Finally, there is milk consumed with cereals and coffee, such as thecafé latte trend, which helps put milk in the fridges of people who would other-wise have stopped drinking it. Although product innovation and launches arerisky, the dairy industry has found that it often pays to invent usage occasionsrather than to reinforce an already favourable set of associations.27

In other words, it may be harder to try to change brand attitudes than to remindpeople of their existing attitudes towards a brand in additional, but appropriate,consumption situations.

Summary

A salient brand is one that has both depth and breadth of brand awareness, so thatcustomers always make sufficient purchases as well as always think of the brandacross a variety of settings in which it could possibly be employed or consumed.Salience is an important first step in building brand equity, but is usually not suffi-cient. For many customers in many situations, other considerations, such as themeaning or image of the brand, come into play. Creating brand meaning involves es-tablishing a brand image and what the brand is characterized by and should stand forin the minds of customers. Although a myriad of different types of brand associationsare possible, brand meaning broadly can be distinguished in terms of more func-tional, performance-related considerations versus more abstract, imagery-related



considerations. Thus, brand meaning is made up of two categories of associations thatexist in customers’ minds related to performance and imagery, with a set of specificsub-categories within each. These associations can be formed directly (from a cus-tomer’s experiences and contact with the brand) or indirectly (through the depictionof the brand in advertising or by some other source of information, such as word ofmouth). The next section describes the two main types of brand meaning – brandperformance and brand imagery – and the sub-categories within each.

Brand performanceThe product itself is at the heart of brand equity, because it is the primary influence onwhat consumers experience with a brand, what they hear about a brand from othersand what the brand owner can tell customers about the brand. Designing and deliver-ing a product that satisfies consumer needs and wants is a prerequisite for successfulmarketing, regardless of whether the product is a tangible good, service, organizationor person. To create brand loyalty and resonance, consumers’ experiences with theproduct must at least meet, if not surpass, their expectations. As Chapter 1 noted, stud-ies have shown that high-quality brands tend to perform better financially.

Brand performance relates to the ways in which a product or service attempts to meetcustomers’ more functional needs. As such, it refers to the intrinsic properties of thebrand in terms of inherent product or service characteristics. How well does a brandrate on objective assessments of quality? To what extent does it satisfy utilitarian, aes-thetic and economic customer needs and wants in the product or service category?

Brand performance transcends the ingredients and features that make up theproduct or service to encompass aspects of the brand that augment these characteris-tics. Any of these performance dimensions can serve as a means by which the brandis differentiated. Often, the strongest brand positioning involves performance ad-vantages of some kind, and it is rare that a brand can overcome severe deficiencies.The specific performance attributes and benefits making up functionality will varywidely by category. Nevertheless, there are five important types of attributes andbenefits that often underlie brand performance.28

1. Primary ingredients and supplementary features.2. Product reliability, durability and serviceability.3. Service effectiveness, efficiency and empathy.4. Style and design.5. Price.

Customers often have beliefs about the levels at which the primary ingredients ofthe product operate (eg, low, medium, high or very high). Additionally, they mayhave beliefs as to special, perhaps even patented, features or secondary elements of aproduct that complement these primary ingredients. Thus, some attributes are essen-tial ingredients necessary for a product to work, whereas others are supplementaryfeatures that allow for customization and more versatile, personalized use. Thesetypes of attributes vary by product or service category.

As noted earlier, customers can view the performance of products or services in abroad manner. Reliability refers to the consistency of performance over time and



from purchase to purchase. Durability refers to the expected economic life of theproduct. Serviceability refers to the ease of servicing the product if it needs repair.Thus, perceptions of product performance are affected by factors such as the speed,accuracy and care of delivery and installation; the promptness, courtesy and help-fulness of customer service and training; and the quality of repair service and thetime involved.

Customers often have performance-related associations that stem from the serviceinteractions they have with brands. Along those lines, service effectiveness refers tohow completely the brand satisfies customers’ service requirements. Service efficiencyrefers to the manner in which these services are delivered in terms of speed, respon-siveness and so forth. Finally, service empathy refers to the extent to which serviceproviders are seen as trusting, caring and having the customer’s interests in mind.

Consumers may have associations with a product that go beyond its functional as-pects to more aesthetic considerations, such as its size, shape, materials and colour.Thus, performance may also depend on sensory aspects, such as how a productlooks and feels and perhaps even what it sounds or smells like.

Finally, the pricing policy for the brand can create associations in consumers’minds to the relevant price tier or level for the brand in the category, as well as to itscorresponding price volatility or variance (in terms of the frequency or size of dis-counts, etc.). In other words, the pricing strategy adopted for a brand can dictate howconsumers categorize the price of the brand (eg, as low, medium or high) and howfirm or flexible that price is seen (eg, frequently or infrequently discounted). Con-sumers often have strong beliefs about the price and value of a brand and may or-ganize their product category knowledge in terms of the price tiers of differentbrands.29 (Chapter 5 analyses price associations.)

Brand imageryThe other main type of brand meaning involves brand imagery. Brand imagery dealswith the extrinsic properties of the product or service, including the ways in whichthe brand attempts to meet customers’ psychological or social needs. Brand imageryis how people think about a brand abstractly, rather than what they think the brandactually does. Thus, imagery refers to more intangible aspects of the brand. Imageryassociations can be formed directly (from a consumer’s experiences and contact withthe product, brand, target market or usage situation) or indirectly (through the de-piction of these same considerations as communicated in brand advertising or bysome other source of information, such as word of mouth). Many kinds of intangi-bles can be linked to a brand, but four categories can be highlighted.

1. User profiles.2. Purchase and usage situations.3. Personality and values.4. History, heritage and experiences.

One set of brand imagery associations is the type of person or organization whouses a brand. This imagery may result in a profile or mental image by customers ofactual users or more aspirational, idealized users. Associations of a typical or idealized



brand user may be based on descriptive demographic factors or more abstract psy-chographic factors. Demographic factors might include the following.

• Gender: for example, Nivea cosmetics and Laura Ashley home decoration have‘feminine’ associations, whereas Marlboro cigarettes and Lynx deodorant havemore ‘masculine’ associations.

• Age: for example, Pepsi Cola, Puma and Rip Curl position themselves as youngerthan Coca-Cola, Nike and Patagonia, respectively.

• Identity: for example, Gaymobile is a Danish mobile phone operator focused onthe gay community.

• Income: for example, during the 1980s, Lacoste shirts, Ray-Ban sunglasses andPorsche cars became associated with yuppies – young, affluent, urban professionals.

Psychographic factors include attitudes towards life, careers, possessions, socialissues or political institutions. For example, a brand user might be seen as iconoclas-tic or as more traditional and conservative.

In a business-to-business setting, user imagery might relate to the size or type oforganization. For example, Microsoft might be seen as an ‘aggressive’ company,whereas Patagonia or Timberland might be seen as a ‘caring’ company. User imagerymay focus on more than the characteristics of one type of individual and centre onbroader issues in terms of perceptions of a group. For example, customers maybelieve that a brand is used by many people and therefore view the brand as ‘popu-lar’ or a ‘market leader’.

A second set of associations is under what conditions or situations the brand couldor should be bought and used. Associations of a typical purchase situation may bebased on a number of considerations, such as type of channel (eg, seen as soldthrough department stores, specialist chains or through the internet or some othermeans), specific chains (eg, Habitat and Foot Locker) and ease of purchase and asso-ciated rewards (if any).

Similarly, associations of a typical usage situation may be based on a number ofconsiderations, such as the time of the day, week, month or year to use the brand;location to use the brand (eg, inside or outside the home); and type of activity wherethe brand is used (eg, formal or informal). For example, in terms of usage imagery, ad-vertising for Snickers emphasizes that the bar is ‘packed with peanuts’ and therefore‘satisfies’ as a healthy, filling snack. For a long time, pizza chain restaurants had strongassociations with their channels of distribution – Domino’s was known for deliveryand Pizza Hut for dine-in service – although in recent years each of these competitorshas made inroads in the traditional markets of the others.

Brands may also take on personality traits.30 A brand, like a person, can be charac-terized as being ‘modern’, ‘old-fashioned’, ‘lively’ or ‘exotic.’ Brand personalityreflects how people feel about a brand as a result of what they think the brand is ordoes, the manner in which the brand is marketed and so on. Brands may also take onvalues. Brand personality is often related to the descriptive usage imagery but alsoinvolves richer, more contextual information. Five dimensions of brand personality(with corresponding sub-dimensions) that have been identified are sincerity (eg,down-to-earth, honest, wholesome and cheerful), excitement (eg, daring, spirited,imaginative and up to date), competence (eg, reliable, intelligent, successful), sophisti-cation (eg, upper class and charming) and ruggedness (eg, outdoorsy and tough).31



How is brand personality formed? Although any aspect of marketing may affectbrand personality, advertising may be especially influential because of the inferencesconsumers make about the underlying user or usage situation depicted. Advertisersmay imbue a brand with personality traits through anthropomorphization and prod-uct animation techniques (eg, M&Ms), personification through the use of brandcharacters (eg, Jolly Green Giant), the creation of user imagery (eg, the Oxo family)and so on.32 More generally, advertising may affect brand personality by the mannerin which it depicts the brand – for example, the actors, the tone or style of the creativestrategy and the emotions or feelings evoked. Once brands develop a personality, itcan be difficult for consumers to accept information that they see as inconsistent withthat personality.33

Although user imagery, especially in advertising, is a prime source of brandpersonality, user imagery and brand personality may not always be in agreement. Inproduct categories where performance-related attributes are more central in con-sumer decisions (eg, food products), brand personality and user imagery may bemuch less related. Differences may arise in other instances as well. For example, atone time, Perrier’s brand personality was ‘sophisticated’ and ‘stylish’, whereas itsactual user imagery was seen more as ‘flashy’ and ‘trendy’.

In those categories in which user and usage imagery are important to consumerdecisions, however, brand personality and user imagery are more likely to be related(eg, for cars, beer, alcohol, cigarettes and cosmetics). Thus, consumers often choosebrands that have a personality that is consistent with their own self-concept, al-though in some cases the match may be based on consumer’s desired self-imagerather than their actual image.34 These effects may also be more pronounced for pub-licly consumed products than for privately consumed goods.35 On the other hand,consumers who are high ‘self-monitors’ (ie, sensitive to how others see them) aremore likely to choose brands whose personalities fit the consumption situation.36

Finally, brands may take on associations with their past and certain noteworthyevents in their history. These types of associations may involve distinctly personalexperiences and episodes or be related to past behaviour and experiences of friends,family or others. Consequently, these types of associations may be fairly idiosyn-cratic, although sometimes exhibiting certain commonalties. Alternatively, theseassociations may be more public and broad-based and therefore be shared to a largerdegree by people. For example, there may be associations with aspects of the mar-keting for the brand – for example, the colour of the product or look of its packaging,the company or person that makes the product and the country in which it ismade, the type of shop in which it is sold, the events for which the brand is a sponsorand the people who endorse the brand. In any case, associations with history, her-itage and experiences involve more specific, concrete examples that transcend thegeneralizations that make up the usage imagery. In the extreme case, brands becomeiconic by combining all these types of associations into what is in effect a myth, tap-ping into enduring consumer hopes and dreams.37

Summary

A number of types of associations related to either performance and imagery maybecome linked to a brand. Regardless of the type, brand associations making up the



brand image and meaning can be characterized and profiled according to threeimportant dimensions – strength, favourability and uniqueness – that build brandequity. Successful results on these three dimensions produce the most positive brandresponses, the underpinning of intense and active brand loyalty.

To create brand equity, it is important that the brand has some strong, favourableand unique brand associations in that order. In other words, it doesn’t matter howunique a brand association is unless customers evaluate the association favourably,and it doesn’t matter how desirable a brand association is unless it is sufficientlystrong that customers actually recall it and link it to the brand. At the same time, itshould be recognized that not all strong associations are favourable and not allfavourable associations are unique.

Creating strong, favourable and unique associations is challenging, but essentialin terms of building customer-based brand equity. Strong brands establishfavourable and unique associations with consumers. Brand meaning is what helps toproduce brand responses. Brand responses refers to how customers respond to thebrand and all its marketing activity and other sources of information – that is, whatcustomers think or feel about the brand. Brand responses can be distinguishedaccording to brand judgements and brand feelings – that is, in terms of whether theyarise from the ‘head’ or from the ‘heart’, as the following sections describe.

Brand judgementsBrand judgements focus on customers’ personal opinions and evaluations. Theyinvolve how customers put together all the different performance and imagery asso-ciations of a brand to form kinds of opinions. Customers may make all types ofjudgements with respect to a brand, but in terms of creating a strong brand, fourtypes of summary brand judgements are particularly important: quality, credibility,consideration and superiority.

Brand quality

Brand attitudes are defined in terms of consumers’ overall evaluations of a brand.38

Attitudes are important because they often form the basis for actions and behaviourby consumers with a brand (eg, brand choice). Such attitudes generally depend onspecific considerations concerning the attributes and benefits of the brand. For exam-ple, consider Sheraton hotels. A consumer’s attitude towards Sheraton depends onhow much he or she believes that the brand is characterized by certain associationsthat matter to the consumer for a hotel chain (eg, location; room comfort, design, andappearance; service quality of staff; recreational facilities; food service; security;prices; and so on).

There is a host of attitudes that customers may hold towards brands, but the mostimportant relate to the perceived quality of the brand. Other notable attitudes relatedto quality pertain to perceptions of value and satisfaction. Perceived quality measuresare inherent in many approaches to brand equity. In the annual EquiTrend survey byTotal Research, 20,000 US consumers rate 1,000 brands across 35 categories on 5dimensions: familiarity, quality, purchase intent, brand expectations and distinctive-ness. Total research then creates an Equity Score based on the first three measures.39



Brand credibility

Customers may transcend specific brand quality concerns to form judgements withrespect to the company or organization behind the brand. As Chapter 11 describes,brand credibility refers to the extent to which the brand is seen as credible in terms of:perceived expertise, trustworthiness and likability. Is the brand seen as:

• competent, innovative and a market leader (brand expertise);• dependable and keeping customer interests in mind (brand trustworthiness); and• fun, interesting and worth spending time with (brand likeability)?

In other words, credibility concerns whether consumers see the company or organi-zation behind the brand as good at what they do, concerned about their customers orjust easy to like.

Brand consideration

Eliciting favourable brand attitudes and perceptions of credibility is important butmay be insufficient if customers do not consider the brand for possible purchase orusage. As noted earlier, consideration is more than mere awareness. It deals with thelikelihood that customers will include the brand in the set of possible options ofbrands they might buy or use. Consideration depends in part on how personally rel-evant customers find the brand – that is, the extent to which customers view thebrand as being appropriate and meaningful. Thus, customers often make an ap-praisal as to whether or not they have any personal interest in a brand and if theywould or should ever buy a brand. Brand consideration is a crucial filter in terms ofbuilding brand equity. No matter how highly regarded or credible a brand may be,unless it is deemed relevant, customers will keep a brand at a distance and never em-brace it. Brand consideration depends in large part on the extent to which strong andfavourable brand associations can be created as part of the brand image.

Brand superiority

Superiority relates to the extent to which customers view a brand as unique and bet-ter than others. In other words, do customers believe that the brand offers advan-tages over other brands? Superiority is critical in terms of building intense and activerelationships with customers and depends on the number and nature of uniquebrand associations that make up the brand image.

Brand feelingsBrand feelings are customers’ emotional responses and reactions with respect to abrand. They also relate to the social currency evoked by a brand. What feelings areevoked by the marketing? How does the brand affect customers’ feelings aboutthemselves and their relationships with others? These feelings can be mild or intense,positive or negative.

Such emotions can become so strongly associated that they are accessible duringproduct consumption or use. Researchers have defined transformational advertising as



advertising designed to change consumers’ perceptions of the actual usage experi-ence with the product.40 For example, Herbal Essence shampoo has been positionedas offering a revitalizing, sensual experience. In a parody of a famous scene from thefilm When Harry Met Sally, ads show scenes of women reaching heights of pleasurewhile lathering, exclaiming ‘Yes, Yes, YES.’ Brand Briefing 2.2 describes how L’Oréalhas engendered brand feelings with consumers.

Brand Briefing 2.2

Managing feelings and user images at L’Oréal

In 1907, L’Oréal began in the hair-colour business. The company soon branched outinto other cleansing and beauty products. L’Oréal markets 50 brands in 130 coun-tries, 17 of the brands are global, in all sectors of the beauty business: hair colour,perms, styling aids, body and skincare, cleansers and fragrances.

L’Oréal products are found in all distribution channels, from hairdressers and per-fumeries to supermarkets, health/beauty outlets, pharmacies and direct mail. Still,the company is active in only one business, cosmetics, which accounts for 98 per-cent of turnover.

Part of L’Oréal’s success is attributed to a strategy diversifing the cultural origins ofits brands. They can convey Italian elegance, New York street smarts or Frenchbeauty – but this does not mean an ‘Italian’ brand is aimed at the Italian market.The portfolio consists of ‘European’ brands like L’Oréal Paris, Lancôme or GiorgioArmani; ‘American’ brands like Matrix, Redken, Ralph Lauren, Kiehl’s, Maybellineand Soft Sheen-Carson; ‘Asian’ brands such as the Japanese brand Shu Uemura orthe Chinese brand Yu Sai Kan. Through this diversity, L’Oréal is reaching out tomore people across a bigger range of incomes and cultures than just about anyother beauty products company.

Each brand is managed to give the right associations and feelings. L’Oréal used the‘Because I’m worth it’ slogan for many years. This has been replaced by ‘Becauseyou’re worth it’ – probably to shift power to the consumer instead of the spokes-person in the advertising. L’Oréal has also systematically looked for the rightspokespersons, such as Penelope Cruz and Scarlet Johansson.

In 2006 L’Oréal took over the ethics-based brand The Body Shop, an area where noL’Oréal brands were present.

L’Oréal has a number of guiding values behind the portfolio of brands.

● Striving for excellence: ‘Perfection is our goal. We are determined to continueenhancing or brand portfolio with innovative products and to meet the most de-manding standards of quality and product safety at all times.’

● A passion for adventure: ‘Our expertise drives our passion for new discoveriesand innovation in cosmetics. Each new achievement – each step forward – is initself a new beginning.’



The following are six important types of brand-building feelings.41

1. Warmth: soothing feelings. A brand makes consumers feel a sense of calm orpeacefulness. Consumers may feel sentimental, warm-hearted or affectionateabout the brand.

2. Fun: upbeat feelings. A brand makes consumers feel amused, light-hearted,joyous, playful and cheerful.

3. Excitement: a different form of upbeat feeling. A brand makes consumers feelenergized and feel that they are experiencing something special. Brands thatevoke feelings of excitement may result in consumers feeling a sense of elation, of‘being alive’ or being cool or sexy.

4. Security: a brand produces a feeling of safety, comfort and self-assurance. Con-sumers do not experience worry or concerns that they might have otherwise felt.

5. Social approval: consumers have positive feelings about the reactions of others –that is, they feel that others look favourably on their appearance or behaviour.This approval may be a result of direct acknowledgment of the consumer’s use ofthe brand by others or may be less overt and a result of attribution of product useto consumers.

6. Self-respect: consumers feel better about themselves. They feel a sense of pride,accomplishment or fulfillment.


● Enrichment through diversity: ‘Understanding and valuing each individual is anessential part of our corporate culture. Our staff members come from many dif-ferent backgrounds and work together to offer a full range of products throughvaried distribution channels. Our goal is to serve the beauty and well-being of ourconsumers in all cultures throughout the world.’

● Valuing individual talent: ‘Just as we are dedicated to enhancing the well-being ofour consumers, we also make it a priority to ensure that each employee has theopportunity to develop his or her potential through personal and professionalgrowth.’

● Leading innovation in beauty: ‘Research is as much a part of our businessas marketing, sensitivity to consumer needs is as important as scientific rigor,and know-how and expertise are as essential as intuition. Building on our unri-valled experience and expertise, fundamental research is a specific focus ofinvestment that drives creativity and contributes to developing the cosmetics oftomorrow.’

Sources: Sandra O’Loughlin, ‘L’Oréal believes Johansson is “worth it”’, Brandweek, 9 January 2006;Sandra O’Loughlin, ‘Penelope Cruz is natural match for L’Oréal’, Brandweek, 9 January 2006; www.loreal.com; BusinessWeek online, ‘L’Oréal: the beauty of global branding’, 1999; www.bbc.co.uk, ‘Body Shopagrees L’Oréal takeover’, 17 March 2006.



The first three types of feelings are experiential and immediate, increasing in levelof intensity. The latter three types are private and enduring, increasing in level ofintensity.

Summary

Although all types of customer responses are possible – driven from both the headand heart – what matters is how positive these responses are. Additionally, it isimportant that the responses are accessible and come to mind when consumers thinkof the brand. Brand judgements and feelings can only favourably affect consumerbehaviour if consumers internalize or think of positive responses in their encounterswith the brand.

Brand resonanceThe final step of the CBBE model focuses on the ultimate relationship and level ofidentification that the customer has with the brand. Brand resonance refers to thenature of this relationship and the extent to which customers feel they are ‘in sync’with the brand. Examples of brands with high resonance include Harley-Davidson,Virgin, Apple and football clubs. Resonance is characterized in terms of intensity orthe depth of the psychological bond that customers have with the brand, as well asthe level of activity engendered by this loyalty (eg, repeat purchase rates and theextent to which customers seek out brand information, events and other loyalcustomers). Resonance can be broken down into four categories.

1. Behavioural loyalty.2. Attitudinal attachment.3. Sense of community.4. Active engagement.

Behavioural loyalty relates to repeat purchases and the amount or share of categoryvolume attributed to the brand – that is, the ‘share of category requirements’. In otherwords, how often do customers purchase a brand and how much do they purchase?To make a profit, the brand must be bought often and in volume. The lifetime value ofloyal consumers can be enormous.42 For example, a loyal General Motors customercould be worth €189,000 over his or her lifetime (assuming 11 or more vehicles boughtand word-of-mouth endorsement that makes friends and relatives more likely to con-sider GM products). Similarly, experts have estimated that the lifetime value of asophisticated computer user (defined as one who buys a machine and software aboutevery two years) is about €30,700. A user who postpones purchases as long as possiblewas estimated to provide €17,100 in lifetime value.

Behavioural loyalty is necessary but not sufficient for resonance to occur.43 Somecustomers may buy out of necessity, buying because the brand is the only productstocked or the only one they can afford. To create resonance, there also needs to be astrong personal attachment. Customers should go beyond having a positive attitudeto viewing the brand as something special. For example, customers with a great dealof attitudinal attachment to a brand may state that they ‘love’ the brand, describe it



as one of their favourite possessions or view it as a ‘little pleasure’ that they lookforward to.

Research has shown that mere satisfaction may not be enough.44 Xerox found thatif customer satisfaction was ranked on a scale of 1 (completely dissatisfied) to 5 (com-pletely satisfied), customers who rated their products and services as ‘4’ – and thuswere satisfied – were six times more likely to defect to competitors than those cus-tomers who provided ratings of ‘5’.45 Similarly, Frederick Reichheld points out thatalthough more than 90 percent of car buyers are satisfied or very satisfied when theydrive away from the dealer’s showroom, fewer than half buy the same brand of carthe next time.46 Creating greater loyalty requires deeper attitudinal attachment,which can be generated by developing marketing, products and services that fullysatisfy consumer needs.

A brand may also take on broader meaning to the customer in terms of a sense ofcommunity.47 Identification with a brand community may reflect an important socialphenomenon whereby customers feel a kinship or affiliation with other people asso-ciated with the brand. These connections may involve fellow brand users or cus-tomers or may involve employees or representatives of the company. They may alsooccur online.48 Brand Briefing 2.3 profiles three ways to help build brand communi-ties. A stronger sense of community among loyal users can engender favourablebrand attitudes and intentions.49

Brand Briefing 2.3

Building brand communities

Apple

Apple encourages owners of its computers to form local user groups. By 2005, therewere 700 groups, ranging in size from fewer than 25 members to more than 1,000.The groups provide Apple owners with opportunities to learn more about their com-puters, share ideas and get product discounts, as well as sponsor special activitiesand events and perform community service. A visit to Apple’s website helps cus-tomers find nearby user groups.

Harley-Davidson

The motorcycle company sponsors the Harley Owners Group (HOG), which by2005 had 900,000 members in groups all over the world. They share a simple mis-sion: ‘To ride and have fun.’ The first-time buyer of a Harley-Davidson motorcyclegets a free one-year membership. HOG benefits include a magazine, Hog Tales, atouring handbook, emergency road service, insurance, discount hotel rates and aprogramme enabling members to rent Harleys while on holiday. The company alsomaintains a website devoted to HOG, which includes information on groups andevents and features a special members-only section.



Finally, perhaps the strongest affirmation of brand loyalty is when customers arewilling to invest time, energy, money or other resources in the brand beyond thoseexpended during purchase or consumption of the brand. For example, customersmay choose to join a club, receive product updates and exchange correspondencewith other brand users or formal or informal representatives of the brand. They maychoose to visit brand-related websites, participate in chat rooms and so on. In thiscase, customers themselves became brand evangelists and ambassadors, so helpingto communicate about the brand and strengthen the brand ties of others. Strongattitudinal attachment or social identity or both are typically necessary, however, foractive engagement with a brand.

In summary, brand relationships can be characterized in terms of intensity andactivity. Intensity refers to the strength of the attitudinal attachment and sense ofcommunity. In other words, how deeply felt is the loyalty? Activity refers to howfrequently the consumer buys and uses the brand, as well as engages in other activi-ties not related to purchase and consumption. In other words, in how many differentways does brand loyalty manifest itself in day-to-day consumer behaviour?

Implications for building a brandThe importance of the customer-based brand equity model is in the road map andguidance it provides for building a brand. It provides a yardstick by which brandscan assess their progress, as well as a guide for marketing research initiatives. Withrespect to the latter, one CBBE application is in terms of brand-tracking and provid-ing quantitative measures of the success of brand-building efforts (see Chapter 8).Figure 2.8 contains a set of candidate measures for the six brand building blocks. Themodel also reinforces a number of branding tenets, five of which are particularlynoteworthy.


Jeep

In addition to the Jeep enthusiast clubs throughout the world, Jeep owners can meetwith their vehicles in wilderness areas across America as part of the company’s offi-cial Jeep Jamborees and Camp Jeep. Since the first camp in 1995, 28,000 peoplehave attended the three-day sessions, where they practise off-road driving and meetother owners. Jeep Jamborees bring owners and their families together for two-day,off-road adventures. Promising to be ‘every bit as muddy’, Camp Jeep on the Roadwent to eight cities in 2005 to allow existing and prospective Jeep 4 × 4 owners toput the vehicles through their paces on the road and off.



Figure 2.8 Possible measures of brand building blocks

1. Salience

• What brands of product or service category can you think of? (Using increasingly specific productcategory cues.)

• Have you ever heard of these brands?• Which brands might you be likely to use under the following situations . . . ?• How frequently do you think of this brand?

2. Performance

• Compared with other brands in the category, how well does this brand provide the basic functionsof the product or service category?

• Compared with other brands in the category, how well does this brand satisfy the basic needs ofthe product or service category?

• To what extent does this brand have special features?• How reliable is this brand?• How durable is this brand?• How easily serviced is this brand?• How effective is this brand’s service? Does it completely satisfy your requirements?• How efficient is this brand’s service in terms of speed, responsiveness and so forth?• How courteous and helpful are the providers of this brand’s service?• How stylish do you find this brand?• How much do you like the look, feel and other design aspects of this brand?• Compared with other brands in the category with which it competes, are this brand’s prices gener-

ally higher, lower or about the same?• Compared with other brands in the category with which it competes, do this brand’s prices change

more frequently, less frequently or about the same amount?

3. Imagery

• To what extent do people you admire and respect use this brand?• How much do you like people who use this brand?• How well do the following words describe this brand: down to earth, honest, daring, up to date,

reliable, successful, upper class, charming, outdoorsy?• What places are appropriate to buy this brand?• How appropriate are the following situations to using this brand?• Can you buy this brand in a lot of places?• Is this a brand that you can use in a lot of different situations?• To what extent does thinking of the brand bring back pleasant memories?• To what extent do you feel you grew up with the brand?

4. Judgements

• QualityWhat is your overall opinion of this brand?What is your assessment of the product quality of this brand?To what extent does this brand fully satisfy your product needs?How good a value is this brand?

• CredibilityHow knowledgeable are the makers of this brand?How innovative are the makers of this brand?How much do you trust the makers of this brand? ➔



Figure 2.8 Continued

To what extent do the makers of this brand understand your needs?To what extent do the makers of this brand care about your opinions?To what extent do the makers of this brand have your interests in mind?How much do you like this brand?How much do you admire this brand?How much do you respect this brand?

• ConsiderationHow likely would you be to recommend this brand to others?Which are your favourite products in this brand category?How personally relevant is this brand to you?

• SuperiorityHow unique is this brand?To what extent does this brand offer advantages that other brands cannot?How superior is this brand to others in the category?

5. Feelings

Does this brand give you a feeling of warmth?Does this brand give you a feeling of fun?Does this brand give you a feeling of excitement?Does this brand give you a feeling of security?Does this brand give you a feeling of social approval?Does this brand give you a feeling of self-respect?

6. Resonance

• LoyaltyI consider myself loyal to this brand.I buy this brand whenever I can.I buy as much of this brand as I can.I feel this is the only brand of this product I need.This is the one brand I would prefer to buy/use.If this brand were not available, it would make a difference to me if I had to use another brand.I would go out of my way to use this brand.

• AttachmentI really love this brand.I would really miss this brand if it went away.This brand is special to me.This brand is more than a product to me.

• CommunityI really identify with people who use this brand.I feel like I almost belong to a club with other users of this brand.This is a brand used by people like me.I feel a deep connection with others who use this brand.

• EngagementI really like to talk about this brand to others.I am always interested in learning more about this brand.I would be interested in merchandise with this brand’s name on it.



Customers’ own brands

The premise of the CBBE model is that the measure of the strength of a brand dependson how consumers think, feel and act with respect to that brand. In particular, thestrongest brands will be those to which consumers become so attached and passion-ate that they, in effect, become evangelists or missionaries and attempt to share theirbeliefs and spread the word about the brand. The point to realize is that the power ofthe brand and its ultimate value to the firm resides with customers. It is through cus-tomers learning about and experiencing a brand that they end up thinking and actingin a way that allows the firm to reap the benefits of brand equity. Although marketersmust take responsibility for their brand-building plans, the success of such marketingdepends on how consumers respond. This response, in turn, depends on the knowl-edge that has been created in their minds about those brands.

Don’t take shortcuts with brands

The CBBE model reinforces the fact that there are no shortcuts in building a brand.A great brand is not built by accident. It is the product of carefully accomplishing –either explicitly or implicitly – a series of logically linked steps with consumers. Themore explicitly the steps are recognized and defined as concrete goals, the morelikely it is that they will receive the proper attention and thus be fully realized, pro-viding the greatest contribution to brand building. The length of time taken to builda strong brand will therefore be directly proportional to the amount of time it takesto create sufficient awareness and understanding so that firmly held and felt beliefsand attitudes about the brand are formed that can serve as the foundation for brandequity.

The brand-building steps may not be equally difficult. In particular, creatingbrand identity is a step that effective marketing can accomplish in a relatively shorttime. Unfortunately, this step is the one that many brand marketers tend to skip intheir haste to quickly establish an image for the brand (as is evident by the failed dot-com brands whose target market had no inkling as to what they did). As Chapter 3describes, it is difficult for consumers to appreciate the advantages and uniqueness ofa brand unless they have a frame of reference as to what the brand is supposed to doand with whom or what it is supposed to compete. Similarly, it is difficult for con-sumers to achieve high levels of positive responses without having a reasonably com-plete understanding of the characteristics of the brand.

I am proud to have others know I use this brand.I like to visit the website for this brand.Compared with other people, I follow news about this brand closely.

It should be recognized that the core brand values at the bottom two levels of the pyramid – brandsalience, performance and imagery – are typically more idiosyncratic and unique to a product andservice category than other brand values.

Figure 2.8 Continued



Finally, due to circumstances in the marketplace, consumers may actually start arepeat purchase or behavioural loyalty relationship with a brand without havingmany underlying feelings, judgements or associations. Nevertheless, these otherbrand building blocks will have to come into place at some point to create true reso-nance. That is, although the start point may differ, the same steps in brand buildingeventually must occur to create a truly strong brand.

Brands should have a duality

One important point reinforced by the model is that a strong brand has a duality inthat it appeals to both the head and the heart. Thus, although there are perhaps twoways to build loyalty and resonance – going up the left side of the pyramid in termsof product-related performance associations and resulting judgements or going upthe right side in terms of non-product-related imagery associations and resultingfeelings – strong brands often do both. Strong brands blend product performanceand imagery to create a rich, varied, but complementary set of consumer responsesto the brand.

By appealing to both rational and emotional concerns, a strong brand providesconsumers with many access points while reducing competitive vulnerability. Ratio-nal concerns can satisfy utilitarian needs, whereas emotional concerns can satisfypsychological or emotional needs. Combining the two can lead to a formidablebrand position. Consistent with this reasoning, a McKinsey study of 51 brands foundthat having both distinctive physical and emotional benefits drove greater share-holder value, especially when the two were linked.50

Brands should have richness

The level of detail in the CBBE model highlights ways to create meaning with con-sumers and the range of possible avenues to elicit consumer responses. Collectively,these aspects of brand meaning and the resulting responses produce strong con-sumer bonds. The associations making up the brand image may be reinforcing,helping to strengthen or increase the favourability of other brand associations, ormay be unique, helping to add distinctiveness or offset some potential deficiencies.Strong brands thus have both breadth (in terms of duality) and depth (in terms ofrichness).

At the same time, brands should not necessarily be expected to score highly on allthe various dimensions and categories making up each core brand value. Buildingblocks can have hierarchies in their own right. For example, with respect to brandawareness, it is typically important to first establish category identification in someway before considering strategies to expand brand breadth via needs satisfied orbenefits offered. With brand performance, it is often necessary to first link primarycharacteristics and related features before attempting to link additional, moreperipheral associations. Similarly, brand imagery often begins with a concrete articu-lation of user and usage imagery that, over time, leads to broader, more abstractbrand associations of personality, value, history, heritage and experience. Brandjudgements usually begin with positive quality and credibility perceptions that canlead to brand consideration and then perhaps to assessments of brand superiority.



Brand feelings usually start with either experiential ones (warmth, fun and excite-ment) or inward ones (security, social approval and self-respect). Finally, resonanceagain has a clear ordering, whereby behavioural loyalty is a starting point but attitu-dinal attachment or a sense of community is almost always needed for activeengagement to occur.

Brand resonance provides important focus

Brand resonance is the pinnacle of the CBBE model and provides important focusand priority for making decisions about marketing. Marketers should use reso-nance as a goal and a means to interpret their brand-related marketing activities.The question to ask is: to what extent is marketing activity affecting the elementsof brand resonance – consumer loyalty, attachment, community and engagement?Is marketing creating brand performance and imagery associations, and consumerjudgements and feelings that will support brand resonance? In an application ofthe CBBE model, the marketing research firm Knowledge Networks found thatbrands that scored highest on loyalty and attachment dimensions were not neces-sarily the same ones that scored high on community and engagement dimensions(see Figure 2.9).

Yet, it must also be recognized that it is virtually impossible for consumers toexperience an intense, active loyalty relationship with all the brands they use. Thus,some brands will be more meaningful than others, in part because of the nature oftheir associated product or service, the characteristics of the consumer and so on.When it is difficult to create a varied set of feelings and imagery associations,marketers may not be able to obtain the ‘deeper’ aspects of brand resonance. Never-theless, by taking a broader view of brand loyalty, marketers may be able to gain amore holistic appreciation for their brand and how it connects to consumers. Bydefining the proper role for the brand, higher levels of brand resonance should beobtainable.

Figure 2.9 Brand rankings on resonance dimensions (USA, autumn 2001)

Rank Brand loyalty Brand attachment Brand community Brand engagement

1 Harley-Davidson Harley-Davidson Harley-Davidson Harley-Davidson2 Hershey’s Hershey’s Lifetime Television Lifetime Television3 Campbells Campbell’s Public Broadcasting

ChannelLexus

4 Clorox Discovery Channel Fidelity Investments Discovery Channel5 Heinz BMW MSN Public Broadcasting

Channel6 Kodak Wal-Mart Lexus Wal-Mart7 Kraft Public Broadcasting Discovery Channel BMW

Channel8 Wal-Mart Kraft AOL Dell9 Duracell Kodak Chevrolet Toyota

10 Discovery NBC Hershey’s Fidelity InvestmentsChannel



CREATING CUSTOMER VALUE

Customer–brand relationships are the foundation of brand resonance and buildinga strong brand. The importance to firms of adopting a strong consumer and cus-tomer orientation has been espoused for years. The CBBE model puts that notion upfront, making it clear that the power of a brand resides in the minds of consumersand customers. Brand Briefing 2.4 describes some criteria that point to whether ornot a company is consumercentric.

Even so, many firms find themselves paying a price for lacking customer focus.Even the biggest firms, such as Volkswagen, can stumble.

Brand Briefing 2.4

Putting customers first

Most employees don’t have any idea what their company’s return on invested cap-ital is, let alone the returns on specific customer segments – and even if they knew,they’d be powerless to do anything about it. But according to Selden and Colvin, afew companies, such as Dell, Best Buy and Royal Bank of Canada, have been solidstocks for shareholders because of their customercentric approach. According tothese authors, customercentricity means that all employees understand how theiractions affect share price. They maintain that customercentric companies are agood bet for investors because they hold an advantage that can lead to a jump inshare price. To determine if a company is customer-focused, Selden and Colvinsuggest customers ask themselves these questions.

1. Is the company looking for ways to take care of you? Only a few companies identifycustomer needs first and then create ways to meet them. Too many try to makecustomers buy the products and services they already offer. Royal Bank ofCanada is an example of a company that found a customer segment with uniqueneeds and met those needs. Many of the bank’s customers were Canadians whospent winters in Florida or Arizona. Those customers, who tended to be affluent,wanted to borrow money in the USA for homes and get a US credit rating thatreflected their Canadian record. They also wanted to be served by employeeswho knew the USA as well as Canada. To serve those customers, the bank openeda branch in Florida through its US subsidiary. The results have been exceptional:customers signed up in droves. Opening branches aimed at specific customersegments represented a growth opportunity for the bank’s shareholders.

2. Does the company know its customers well enough to differentiate between them?True differentiation means knowing what your customer segments are, whateach group wants, where the groups are shopping and how to serve customersindividually.



VolkswagenAfter a remarkable revival in the 1990s when it enjoyed 50 percent growth for 7 years, the turn of the century was not kind to Volkswagen. By 2005, theGerman carmaker was experiencing stagnant sales and was losing money inthe US market. The culprit? According to chief executive Bernd Pischetsrieder:‘The biggest failure in Volkswagen is too little customer-focus.’ In his view, thecompany was paying too much attention to technology and features that he feltcustomers didn’t want to pay for. According to Pischetsrieder: ‘The first ques-tion is, how does it help the customer and will the customer pay for it? Whenwe have a test drive, the question is not whether I like it. It’s will the customerpay for it or will the customer not even notice it?’51

VW is not alone in its recognition of the financial value of customer experiences.Many firms are now defining the financial value of prospective and actual customersand using marketing to optimize that value.


3. Is someone accountable for customers? At most companies, departments ownpieces, but no one owns any specific customer segment. But at companies withcustomercentric approaches, things are different. At Best Buy, for example, anindividual is accountable for the ‘soccer-mom’ segment across its US stores.

4. Is the company managed for shareholder value? If a company is managed forshareholder value, employees know about earning a return on invested capitalthat exceeds the cost of capital, plus investing increasing amounts of capitalat that positive spread and maintaining that spread for as long as possible.Customercentric companies apply those criteria to customer segments. Theyknow how much capital they’ve invested in a segment and how much returnthey earn on it. They maintain the positive spread by creating and reinventingenduring customer relationships.

5. Is the company testing new customer offers and learning from the results? Con-stant learning about what customers want and a formal process for sharing itare critical to customercentricity. Seven-Eleven Japan does this well. Everyweek employees from all over Japan meet to discuss hypotheses tested andverified in the stores. Ideas such as changing the lunch menu for the next daybased on the predicted weather (like serving hot noodles on a cool day) areheard throughout the company.

Sources: Larry Selden and Geoffrey Colvin, ‘5 rules for finding the next Dell’, Fortune, 12 July 2004; LarrySelden and Geoffrey Colvin, Angel Customers and Demon Customers: Discover which is which and turbo-charge your stock, The Woodlands, TX: Portfolio, 2003.



CHAPTER REVIEW

Customer-based brand equity is the differential effect that brand knowledge has onconsumer response to the marketing of that brand. A brand has positive customer-based brand equity when customers react more favourably to a product and the wayit is marketed when the brand is identified than when it is not (eg, when it is attrib-uted to a fictitiously named or unnamed version of the product).

Brand knowledge can be defined in terms of an associative network memorymodel as a network of nodes and links wherein the brand node in memory has a va-riety of associations linked to it. Brand knowledge can be characterized in terms ofawareness and image. Brand awareness is related to the strength of the brand nodeor trace in memory, as reflected by consumers’ ability to recall or recognize the brandunder different conditions. Brand awareness can be characterized by depth andbreadth. The depth relates to the likelihood that the brand can be recognized or re-called. The breadth relates to the variety of purchase and consumption situations inwhich the brand comes to mind. Brand image is defined as consumer perceptions ofa brand as reflected by the brand associations held in consumers’ memories.

Customer-based brand equity occurs when the consumer has a high level ofawareness and familiarity with the brand and has strong, favourable and uniquebrand associations. In some cases, brand awareness alone is sufficient to result inmore favourable consumer responses – for example, in low-involvement decisionsettings where consumers are willing to base their choices merely on familiar brands.In other cases, the strength, favourability and uniqueness of the brand associationsare critical in determining the differential response making up the brand equity.

To create differential response, it is important to associate unique, meaningfulpoints of difference to the brand to provide a competitive advantage and a ‘reasonwhy’ consumers should buy it. For some brand associations, however, it may be suf-ficient that they are seen as roughly equally favourable with competing brand asso-ciations so that they function as points of parity in consumers’ minds to negatepotential points of difference for competitors. In other words, these associations aredesigned to provide consumers with ‘no reason why not’ to choose the brand. As-suming a positive brand image is created by marketing programmes that link strong,favourable and unique associations to the brand in memory, benefits can result.

The CBBE model maintains that building a strong brand involves a series of logi-cal steps: (1) establishing the proper brand identity, (2) creating the appropriatebrand meaning, (3) eliciting the right brand responses and (4) forging appropriatebrand relationships with customers. Specifically, according to this model, buildinga strong brand involves establishing breadth and depth of brand awareness; creatingstrong, favourable and unique brand associations; eliciting positive, accessible brandresponses; and forging intense, active brand relationships. Achieving these foursteps, in turn, involves establishing six brand building blocks: salience, performance,imagery, judgements, feelings and resonance.

The strongest brands excel in all six building blocks and so fully execute all foursteps in the CBBE model. In the model, the most valuable building block, resonance,occurs when all the other core values are ‘in sync’ with customers’ needs, wants anddesires. In other words, resonance reflects a completely harmonious relationship



between customers and the brand. With true brand resonance, customers have a highdegree of loyalty marked by a close relationship with the brand such that customerslook for ways to interact with the brand and share their experiences with others. Com-panies that achieve resonance and affinity with their customers should reap valuablebenefits, such as greater price premiums and more efficient and effective marketing.

Thus, the premise of the CBBE model is that the true measure of the strength of abrand depends on how consumers think, feel and act with respect to that brand.Achieving brand resonance requires eliciting the proper cognitive appraisals andemotional reactions from customers. That, in turn, necessitates establishing brandidentity and creating the right meaning in terms of brand performance and brand im-agery associations. A brand with the right identity and meaning can result in a cus-tomer believing that the brand is relevant and ‘my kind of product’. The strongestbrands will be those to which consumers become so attached and passionate thatthey, in effect, become evangelists or missionaries and attempt to share their beliefsand spread the word about the brand.

Brand Briefing 2.5

The marketing advantages of strong brands

Customer-based brand equity occurs when consumers respond differently to mar-keting activity because they know a brand than when they do not. The actual natureof how that response differs will depend on the level of brand awareness and howfavourably and uniquely consumers evaluate brand associations, as well as the mar-keting activity under consideration. A number of benefits can result from a strongbrand, both in terms of greater revenue and lower costs.52 For example, Ian Lewisfrom Time-Life (1993) categorizes the factors creating financial value for strongbrands into two categories: factors related to growth (eg, a brand’s ability to attractnew customers, resist competitive activity, introduce line extensions and crossinternational borders) and factors related to profitability (eg, brand loyalty, premiumpricing, lower price elasticity, lower advertising/sales ratios and trade leverage).53

This section considers some of the benefits to a firm of having brands with a highlevel of awareness and a positive brand image.

Greater loyalty and less vulnerability to competitive marketing actions and crises

Research has demonstrated that different types of brand associations – if seen asfavourable – can affect consumer product evaluations, perceptions of quality andpurchase rates.54 This tendency may be especially apparent with difficult-to-assess‘experience’ goods55 and as the uniqueness of brand associations increases.56 Inaddition, familiarity with a brand has been shown to increase consumer confidence,attitude towards the brand, purchase intention57 and mitigate the potential damagefrom a poor trial experience.58




For these and other reasons, one characteristic of brands with a great deal of equityis that consumers feel great loyalty towards them. For example, as noted in Chapter1, at least some top brands have been market leaders for years despite significantchanges in both consumer attitudes and competitive activity over time. Through itall, consumers have valued these brands – what they are and what they represent –sufficiently to stick with them and reject the overtures of competitors, creating asteady stream of revenues for the firm. Research also has found that brands withlarge market shares are more likely to have more loyal customers than brands withsmall market shares, a phenomenon dubbed double jeopardy.59

Brand loyalty is closely related to equity but is a distinct concept. Brand loyalty isoften measured in a behavioural sense through the number of repeat purchases.Yet, a consumer may continually purchase for reasons not related to a strongpreference for the brand, such as when the brand is prominently stocked or fre-quently promoted. Consumers may be in the habit of buying a particular brandwithout really thinking about it. When confronted by a new or resurgent competi-tor providing compelling reasons to switch, consumers’ ties to the brand may betested for the first time.

So, repeat buying is a necessary but not sufficient condition for being a brand-loyalbuyer in an attitudinal sense: someone can repeat buy but not be brand loyal.Brand loyalty is one of the many advantages of creating a positive brand image andof having brand equity.

Returning to the benefits of equity, a brand with a positive image also is morelikely to weather a crisis or downturn in its fortunes.60 Perhaps the most com-pelling example of this fact is Johnson and Johnson’s Tylenol brand. Brand Brief-ing 11.12 describes how J&J contended with a tragic product-tampering episodewith its Tylenol pain reliever in the early 1980s. The company saw its marketshare drop from 37 percent to almost zero overnight and was faced with having towrite off Tylenol as a brand. However, J&J was able to regain Tylenol’s marketshare through the skillful handling of the crisis and having a good deal of brandequity to draw on.

The lesson from J&J’s Tylenol crisis is that effective handling of a crisis requiresswift and sincere actions. There must be an immediate admission that somethinghas gone wrong and an assurance that an effective remedy will be put in place.Most important, the greater the brand equity, the more likely it is that these state-ments will have credibility with consumers, so they will be both understanding andpatient as the firm sets out to solve the crisis. Without brand equity, however, eventhe best-laid plans for recovery may fall short to a suspicious public.61 Finally, itshould also be recognized that, even if there is no crisis, a strong brand offers pro-tection in the case of a marketing downturn or when the brand’s fortunes fall.




Larger margins

Brands with equity can command a price premium.62 Moreover, consumers shouldalso have an inelastic response to price increases and elastic responses to pricedecreases or discounts for the brand over time.63 Consistent with this reasoning,research has shown that consumers loyal to a brand are less likely to switch in theface of price increases and more likely to increase the quantity of the brand pur-chased in the face of price decreases.64 In a competitive sense, brand leaders drawa disproportionate amount of share from smaller-share competitors.65 At the sametime, research has demonstrated that market leaders are relatively immune to pricecompetition from these small-share brands.66

An analysis of consumer goods manufacturers from the extensive PIMS databasefound that, by providing unique and positive messages, a firm could insulate itselffrom future price competition, as witnessed by less negative future price elasticities.Conversely, they also found that non-unique messages could decrease future dif-ferentiation; for example, price promotions for firms that priced above the industryaverage led to more negative future price elasticities.67

The results of a study by the marketing research firm Intelliquest exploring the roleof brand name and price in the decision to purchase business computer buyers isenlightening in that regard.68 Survey respondents were asked: ‘What is the incre-mental dollar value you would be willing to pay over a ‘no-name’ clone computerbrand?’ IBM commanded the greatest price premium, followed by Compaq andHewlett-Packard. Some brands had negative brand equity; they actually receivednegative numbers. Clearly, according to this study, brands have specific meaning inthe personal computer market that consumers value and will pay for.

Chapter 5 reviews pricing strategies and discount policies to build brand equity.

Greater trade co-operation and support

Brand owners often do not sell directly to consumers. Middlemen in the form ofwholesalers, retailers and other parties often play an important role in selling aproduct. The activities of these members of the channels of distribution can thusfacilitate or inhibit the success of the brand. If the brand has a positive brand imagewith consumers, it is more likely to receive favourable treatment from the trade.

Specifically, a brand with a positive image is more likely to have retailers and othermiddlemen respond to the wishes of consumers and actively promote and sellthe brand.69 Recognizing the likelihood of consumer demand, channel members arealso less likely to require any marketing push from the manufacturer and are morelikely to be receptive to any marketing overtures that do arise from the manufac-turer to stock, reorder and display the brand.70 Thus, they should be more likely to




pass through trade promotions, demand smaller slotting allowances and give morefavourable shelf space.

In short, brands with positive customer-based brand equity are more likely to re-ceive greater trade co-operation and support. This treatment might translate intomore prominent display, more attractive promotional offers and so on. Given thatmany consumer decisions are made in the store, the possibility of additional mar-keting push by retailers is important. Chapter 5 describes how marketers can workwith retailers to maximize brand equity.

Increased marketing communication effectiveness

A host of advertising and communication benefits may result from creating aware-ness of and a positive image for a brand. These benefits can be seen by consider-ing the manner in which a consumer responds to marketing communications andhow the marketing communications campaign for a brand with a great deal ofequity may be processed differently by consumers as a result. One well-establishedview of consumer response to marketing communications is hierarchy of effectsmodels. These models assume that consumers move through a series of stages ormental states on the basis of marketing communications – for example, exposureto, attention to, comprehension of, yielding to, retention of and behaving on thebasis of a marketing communication.

A brand with a great deal of equity has created some knowledge structures in con-sumers’ minds. These mental associations increase the likelihood that consumers willpass through various stages of the hierarchy. For example, consider the effects of apositive brand image on the persuasive ability of advertising. As a result of having es-tablished brand awareness and strong, favourable and unique brand associations,consumers may be more likely to notice an ad, may more easily learn about the brandand form favourable opinions, and may retain and act on these beliefs over time.

Academic research has shown that familiar, well-liked brands are less susceptible to ‘interference’ and confusion from competitive ads,71 are more responsive tocreative strategies such as humour appeals72 and are less vulnerable to negative re-actions due to repetition.73 In addition, panel diary members who were highly loyalto a brand increased purchases when advertising for the brand increased.74 Otheradvantages associated with more advertising include increased likelihood of beingthe focus of attention and increased ‘brand interest’.75

Because strong brand associations exist, lower levels of repetition may be necessary.For example, in a classic study of advertising weights, the US beer company Anheuser-Busch ran a field experiment in which it varied the amount of Budweiser advertisingshown to consumers in different matched test markets.76 Seven expenditure levelswere tested, representing increases and decreases from the previous levels: no




advertising, 50 percent less, same level, 50 percent more, double the level, 150 per-cent more, and 200 percent more. These expenditure levels were run for one yearand revealed that the ‘no advertising’ level resulted in the same amount of sales asthe current campaign. In fact, the 50 percent cut in advertising expenditures actuallyresulted in an increase in sales. The experimental results are consistent with the no-tion that strong brands such as Budweiser do not require the same advertising levels,at least over a short period of time, as a less well-known or well-liked brand.77

Similarly, because of brand knowledge structures, consumers may be more likely tonotice sales promotions, direct mail offerings or other sales-orientated marketingcommunications and respond favourably. For example, studies have shown that pro-motion effectiveness is asymmetric in favour of a higher-quality brand.78 Chapter 6outlines how to develop integrated marketing communication campaigns to buildand capitalize on brand equity.

Licensing opportunities

A strong brand often has associations that may be desirable in other product cate-gories. To capitalize on this value, a firm may choose to license its name, logo orother trademark item to another company for use on their products and merchan-dise. Traditionally, licensing has been associated with characters such as Tintin,Smurfs, James Bond and Mickey Mouse, or celebrities and designers such as J-Lo,Giorgio Armani, Pininfarina. Recently, more conventional brands such as Ferrari,Harley-Davidson, Coca-Cola, and others have licensed their brands.

The rationale for the company obtaining the rights to use the trademark is that con-sumers will pay more for a product because of the recognition and image lent bythe trademark. For example, one marketing research study showed that US con-sumers would pay €41 for cookware licensed under a TV cook’s name as opposedto €27 for identical cookware bearing a shop’s name.79

The rationale for the licensor relates to profits, promotion and legal protection. Interms of profits, a firm can expect an average royalty of about 5 percent of thewholesale price of each product, ranging from 2 percent to 10 percent dependingon circumstances. Because there are no manufacturing or marketing costs, theserevenues translate directly to profits. Licensing is also seen as a means to enhancethe awareness and image of the brand. Linking the trademarks to other productsmay broaden its exposure and potentially increase the strength, favourability anduniqueness of brand associations. Finally, licensing may provide legal protection fortrademarks. Licensing the brand for use in certain product categories preventsother firms or potential competitors from legally using the brand name to enterthose categories. For example, Coca-Cola entered licensing agreements coveringradios, glassware, toy trucks and clothes, in part as legal protection. As it turns out,




its licensed products were so successful it has introduced a catalogue sent directlyto consumers that offers a myriad of products bearing the Coca-Cola name.

Despite the potential benefits from licensing related to profitability, image enhance-ment or legal protection, there are risks too. A trademark can become overexposed ifmarketers adopt a saturation policy. Consumers do not necessarily know the motivationor marketing arrangements behind a product and can become confused or even angryif the brand is licensed to a product that seemingly bears no relation. Moreover, if theproduct fails to live up to consumers’ expectations, the brand name could become tar-nished. Chapter 7 discusses licensing and its effect on brand equity in more detail.

Additional brand extension opportunities

A brand extension is when a firm uses an established brand name to enter a new mar-ket. Extensions can be classified into two general categories. A line extension is whena brand name is used to enter a new market segment in the existing product class(eg, with new varieties, new flavours and new sizes). For example, Colgate introducedvarieties of toothpaste with different flavours (eg, Winterfresh gel), that have differentingredients (eg, with baking soda) or provide a specific benefit (eg, tartar control). Acategory extension is when a brand name is used to enter a different product class.For example, the Swiss Army brand capitalized on the precision image of its knives tointroduce watches, sunglasses, writing instruments, travel gear and cutlery.

A brand with a positive image allows the firm to introduce appropriate products asbrand extensions. There are many advantages to this strategy. An extension allowsthe firm to capitalize on consumer knowledge of the parent brand to raise theawareness of and suggest possible associations for the brand extension. Thus, ex-tensions can provide the following benefits to facilitate new product acceptance: re-ducing the risk perceived by customers and distributors, decreasing the cost ofgaining distribution and trial, increasing the efficiency of promotional expenditures,avoiding the cost (and risk) of developing new names, allowing for packaging andlabelling efficiencies and permitting consumer variety-seeking.

Besides facilitating new product acceptance, extensions can also provide ‘feedback’benefits to the parent brand and the company. Extensions may enhance the parentbrand image by improving the strength, favourability and uniqueness of brand as-sociations and by improving perceptions of company credibility (in terms of per-ceived expertise, trustworthiness or likeability). Extensions may also help to conveythe broader meaning of the brand to consumers, clarifying the core benefit propo-sition and business definition of the company. Finally, extensions may also bringnew customers into the brand franchise and increase market coverage.

Academic research has validated many of these assumptions. Studies have shownthat well-known and well-regarded brands can extend more successfully and into




more diverse categories than other brands.80 In addition, the amount of brand eq-uity has been shown to be correlated with the highest- or lowest-quality member inthe product line for vertical product extensions.81 Research has also shown thatpositive symbolic associations may be the basis of these evaluations, even if overallbrand attitude itself is not necessarily high.82

Brands with varied product category associations through past extensions havebeen shown to be especially extendable.83 As a result, introductory marketing cam-paigns for extensions from an established brand may be more efficient than othersuch campaigns.84 Studies have indicated that extension activity has aided (or atleast did not dilute) brand equity for the parent brand. For instance, brand exten-sions strengthened parent brand associations, and ‘flagship brands’ were highly re-sistant to dilution or other potential negative effects caused by negative experienceswith an extension.85 Research has also found evidence of an ownership effect,whereby current owners generally had more favourable responses to brand line ex-tensions.86 Finally, extensions of brands that have both high familiarity and positiveattitudes have been shown to receive higher initial stock market reactions than otherbrands.87

Chapter 12 provides a conceptual model of how consumers evaluate brand exten-sions and presents guidelines for marketers to maximize extension success and itseffect on brand equity.

Other benefits

Finally, brands with positive customer-based brand equity may provide other ad-vantages to the firm not directly related to the products themselves, such as help-ing to attract better employees, generate greater interest from investors and garnermore support from shareholders. In terms of the last point, studies have shown thatbrand equity can be directly related to corporate stock price.88

Discussion questions

1. Pick a brand. Attempt to identify its sources of brand equity. Assess its level of brandawareness and the strength, favourability and uniqueness of its associations.

2. With which brands do you have the most resonance? Why?

3. Can every brand achieve resonance with its customers? Why or why not?

4. Pick a brand. Assess the extent to which the brand is achieving benefits from brandequity.

5. Can you think of any other benefits of creating a strong brand? What might they be?


References and notes

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2John R. Anderson, The Architecture of Cognition, Cambridge, MA: Harvard University Press,1983; Robert S. Wyer Jr and Thomas K. Srull, ‘Person memory and judgment’, PsychologicalReview, 1989, 96 (1): 58–83.

3John R. Rossiter and Larry Percy, Advertising and Promotion Management, New York: McGraw-Hill, 1987.

4Burleigh B. Gardner and Sidney J. Levy, ‘The product and the brand’, Harvard Business Review,March–April 1955: 33–9.

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6H. Herzog, ‘Behavioral science concepts for analyzing the consumer’, in Marketing andthe Behavioral Sciences, ed. Perry Bliss, Boston, MA: Allyn and Bacon, 1963: 76–86; JosephW.Newman, ‘Newinsight,newprogress formarketing’,HarvardBusinessReview,November–December, 1957: 95–102.

7James R. Bettman, An Information Processing Theory of Consumer Choice, Reading, MA: Addison-Wesley, 1979; Rossiter and Percy, Advertising and Promotion Management.

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9For example, see Henry L. Roediger, ‘Inhibition in recall from cuing with recall targets’,Journal of Verbal Learning and Verbal Behavior, 1973, 12: 644–57; and Raymond S. Nickerson,‘Retrieval inhibition from part-set cuing: a persisting enigma in memory research’, Memoryand Cognition, November 1984, 12: 531–52.

10In an interesting twist, it is also the case that consumers would be more likely to recall closelyrelated brands in the category, for example, McDonald’s. See Prakash Nedungadi, ‘Recalland consumer consideration sets’.

11Rashmi Adaval, ‘How good gets better and bad gets worse: understanding the impact of affecton evaluations of known brands’, Journal of Consumer Research, December 2003, 30: 352–67.

12Jacob Jacoby, George J. Syzabillo and Jacqeline Busato-Schach, ‘Information acquisition behav-ior in brand choice situations’, Journal of Consumer Research, 1977, 3: 209–16; Ted Roselius,‘Consumer ranking of risk reduction methods’, Journal of Marketing, January 1977, 35: 56–61.

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14Richard E. Petty and John T. Cacioppo, Communication and Persuasion, New York: Springer-Verlag, 1986.

15‘Advertisers often take bizarre approaches’, Newsday.




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17David A. Aaker, ‘Positioning your brand’, Business Horizons, May/June 1982, 25: 56–62; Al Riesand Jack Trout, Positioning: The battle for your mind, New York: McGraw-Hill, 1979; YoramWind, Product Policy: Concepts, methods and strategy, Reading, MA: Addison-Wesley, 1982.

18Dipankar Chakravarti, Deborah J. MacInnis and Kent Nakamoto, ‘Product category percep-tions, elaborative processing and brand name extension strategies’, in Advances in ConsumerResearch, Vol. 17, eds. M. Goldberg, G. Gorn and R. Pollay, Provo, UT: Association forConsumer Research, 1990: 910–16; Mita Sujan and James R. Bettman, ‘The effects of brandpositioning strategies on consumers’ brand and category perceptions: some insights fromschema research’, Journal of Marketing Research, November 1989, 26: 454–67.

19James R. Bettman and Mita Sujan, ‘Effects of framing on evaluation of comparable and non-comparable alternatives by expert and novice consumers’, Journal of Consumer Research,September 1987, 14: 141–54; Michael D. Johnson, ‘Consumer choice strategies for compar-ing noncomparable alternatives’, Journal of Consumer Research, December 1984, 11: 741–53;C. Whan Park and Daniel C. Smith, ‘Product level choice: a top-down or bottom-upprocess?’, Journal of Consumer Research, December 1989, 16: 289–99.

20Joel B. Cohen and Kanul Basu, ‘Alternative models of categorization: toward a contingentprocessing framework’, Journal of Consumer Research, March 1987, 13: 455–72; PrakashNedungadi and J. Wesley Hutchinson, ‘The prototypicality of brands: relationships withbrand awareness, preference and usage’, in Advances in Consumer Research, Vol. 12, eds.Elizabeth C. Hirschman and Morris B. Holbrook, Provo, UT: Association for ConsumerResearch, 1985: 489–503; Eleanor Rosch and Carolyn B. Mervis, ‘Family resemblance: stud-ies in the internal structure of categories’, Cognitive Psychology, October 1975, 7: 573–605;James Ward and Barbara Loken, ‘The quintessential snack food: measurement of proto-types’, in Advances in Consumer Research, Vol. 13, ed. Richard J. Lutz, Provo, UT: Associationfor Consumer Research, 1986: 126–31.

21Nedungadi and Hutchinson, ‘The prototypicality of brands’; Ward and Loken, ‘The quintes-sential snack food.’

22George S. Day, Allan D. Shocker, and Rajendra K. Srivastava, ‘Customer-oriented approachesto identifying products-markets’, Journal of Marketing, Fall 1979, 43: 8–19.

23K. E. Miller and J. L. Ginter, ‘An investigation of situational variation in brand choice behav-ior and attitude’, Journal of Marketing Research, February 1979, 16: 111–23.

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25Mita Sujan and Christine Dekleva, ‘Product categorization and inference making: some implica-tions for comparative advertising’, Journal of Consumer Research, December 1987, 14: 372–8.

26Thomas A. Fogarty, ‘A company for all seasons’, USA Today, 13 January 2000: B3.27Pat Brophy ‘The future for liquid milk: a southern perspective’, report published by Teagasc,

2002. See also dairy product news at www.nutraingredients.com28David Garvin, ‘Product quality: an important strategic weapon’, Business Horizons,

May–June, 27: 40–3; Philip Kotler and Kevin Lane Keller, Marketing Management, 12th edn,Upper Saddle River, NJ: Prentice Hall, 2000.

29Robert C. Blattberg and Kenneth J. Wisniewski, ‘Price-induced patterns of competition’,Marketing Science, Fall 1989, 8: 291–309.

30Joseph T. Plummer, ‘How personality makes a difference’, Journal of Advertising Research,December 1984/January 1985, 24: 27–31.



31See Jennifer Aaker, ‘Dimensions of brand personality’, Journal of Marketing Research, August1997, 34: 347–57.

32Aaker, ‘Dimensions of brand personality’; Susan Fournier, ‘Consumers and their brands:developing relationship theory in consumer research’, Journal of Consumer Research, 1997, 24 (3): 343–73.

33Gita Venkataramani Johar, Jaideep Sengupta and Jennifer L. Aaker, ‘Two roads to updatingbrand personality impressions: trait versus evaluative inferencing’, Journal of MarketingResearch, November 2005, 42: 458–69.

34M. Joseph Sirgy, ‘Self concept in consumer behavior: a critical review’, Journal of ConsumerResearch, December 1982, 9: 287–300; Lan Nguyen Chaplin and Deborah Roedder John, ‘Thedevelopment of self-brand connections in children and adolescents’, Journal of ConsumerResearch, June 2005, 32: 119–29.

35Timothy R. Graeff, ‘Consumption situations and the effects of brand image on consumers’brand evaluations’, Psychology & Marketing, 1997, 14 (1): 49–70; Timothy R. Graeff, ‘Imagecongruence effects on product evaluations: the role of self-monitoring and public/privateconsumption’, Psychology & Marketing, 1996, 13 (5): 481–99.

36Jennifer L. Aaker, ‘The malleable self: the role of self-expression in persuasion’, Journal ofMarketing Research, 1999, 36 (2): 45–57.

37Douglas B. Holt, How Brands Become Icons, Cambridge, MA: Harvard Business School Press,2004.

38William L. Wilkie, Consumer Behavior, 3rd edn, New York: John Wiley & Sons, 1994.39www.harrisinteractive.com/productsandservices/equitrend.asp40William D. Wells, ‘How advertising works’, unpublished paper, 1980; Christopher P. Puto

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41Lynn R. Kahle, Basil Poulos, and Ajay Sukhdial, ‘Changes in social values in the United Statesduring the past decade’, Journal of Advertising Research, February/March 1988: 35–41.

42Greg Farrell, ‘Marketers put a price on your life’, USA Today, 7 July 1999: 3B.43Arjun Chaudhuri and Morris B. Holbrook, ‘The chain of effects from brand trust and brand

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48Gil McWilliam, ‘Building stronger brands through online communities’, MIT Sloan Manage-ment Review, Spring 2000, 41 (3): 43–54.

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50Nikki Hopewell, ‘Generating brand passion’, Marketing News, 15 May 2005: 10.



51Joseph B. White and Stephen Power, ‘VW chief confronts corporate culture’, Wall StreetJournal, 19 September 2005: B2.

52Brand Briefing 2.5 is based in part on Steven Hoeffler and Kevin Lane Keller, ‘The marketingadvantages of strong brands’, Journal of Brand Management, 10 (6): 421–45, August 2003.

53Ian M. Lewis, ‘Brand equity or why the board of directors needs marketing research’, paperpresented at the ARF Fifth Annual Advertising and Promotion Workshop, 1 February 1993.

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77These results should be interpreted carefully because they do not suggest that large advertis-ing expenditures did not play an important role in creating equity for the brand in the past



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78See Robert C. Blattberg, Richard Briesch and Edward J. Fox, ‘How promotions work’,Marketing Science, 1995, 14: G122–G132. See also Bart J. Bronnenberg and Luc Wathieu,‘Asymmetric promotion effects and brand positioning’, Marketing Science, 1996, 15 (4):379–94. This study shows how the relative promotion effectiveness of high- and low-qualitybrands depends on their positioning for both price and quality.

79Frank E. James, ‘I’ll wear the Coke pants tonight; they go well with my Harley-Davidsonring’, Wall Street Journal, 6 June 1985.

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